Weekly market recap

Your weekly global financial market newsletter

  • The most popular cryptocurrency, Bitcoin, has reached the $100,000 mark. This milestone came after U.S. President-elect Donald Trump announced his intention to nominate cryptocurrency advocate Paul Atkins to head the Securities and Exchange Commission (SEC). While crossing this psychological threshold may lead to profit-taking and a potential price drop, it also boosts media and public interest, which could drive the price even higher.
  • U.S. stocks ended mixed last week, with commodities underperforming in early December, while currency markets were influenced by expectations surrounding the outcomes of several central bank meetings.

Indices

While U.S. stock indices continued their rally and once again reached new all-time highs, the DJIA index failed to maintain its gains, recording a weekly decline following losses in the last two days, primarily due to a drop in UnitedHealth Group’s share price. In contrast, the S&P 500 index surpassed the 6,100-point mark for the first time in history, exceeding the year-end targets of most financial analysts’ forecasts. Notably, growth stocks and technology companies significantly outperformed traditional and value stocks.

European equities also performed well, with German stocks delivering the highest returns. The pan-European STOXX Europe 600 ended 2.00% higher, Germany’s DAX climbed 3.86%, France’s CAC 40 Index put on 2.65% and the UK’s FTSE 100 Index added 0.26%.

US30
-0.60%
US100
+3.31%
US500
+0.96%
GER30
+3.86%

Commodities

The price of gold weakened for the second consecutive week, as its safe-haven appeal—bolstered by the conflict in Ukraine and instability in the Middle East—has not been enough to drive growth. Investors worldwide continue to speculate about the possibility of a Federal Reserve rate cut, but uncertainty persists, leaving gold prices stuck between $2,600 and $2,650 per troy ounce in recent days.

Additionally, the World Gold Council reported a decline in physical gold demand in China, one of the world’s largest gold buyers. Global physically backed gold exchange-traded funds (ETFs) also saw outflows in November, following six months of inflows.

Gold
-0.92%
Silver
+1.11%
BRENT
-1.74%
NATGAS
-7.77%

Forex

The Canadian dollar lost over 1% against the USD during the week, falling to its lowest level in more than four and a half years. This decline came in response to poor labour market data on Friday, when unemployment rose above expectations to its highest level since September 2021. The negative sentiment was further exacerbated by unexpectedly weak Q3 GDP figures and concerns over Donald Trump’s proposed tariffs. As a result, investors are anticipating a rate cut of up to 50 basis points at Wednesday’s Bank of Canada meeting.

The USD also strengthened against the Japanese yen, despite expectations that the Bank of Japan (BoJ) may raise interest rates following stronger-than-expected macroeconomic data on Japanese economic growth. However, the timing of such a move remains uncertain, as BoJ board member Toyoaki Nakamura expressed concerns about the sustainability of wage growth and pointed to signs of economic weakness.

EUR/USD
-0.09%
USD/JPY
+0.11%
GBP/USD
+0.08%
USD/CAD
+1.10%

Macro

The first week of December was dominated by Friday’s U.S. labor market data, which did not bring any major surprises and were generally well-received by the market. On Tuesday, the Labor Department reported that the number of job openings in October increased to 7.74 million, up from September’s revised reading of 7.37 million.

On Wednesday, ADP reported that private employers added 146,000 jobs in November—the fewest in three months—following a downwardly revised increase of 184,000 in October and slightly below forecasts of 150,000.

On Friday, the Labor Department reported that the U.S. added a seasonally adjusted 227,000 jobs in November, slightly exceeding consensus estimates and reflecting a sharp rebound from October’s disappointing data. This further cemented expectations that the Federal Reserve would cut the benchmark interest rate by 25 basis points on December 18. However, these expectations were called into question by Fed officials over the weekend.

The ISM U.S. Manufacturing Purchasing Managers’ Index (PMI) rose to 48.4 points in November (estimate: 47.5 points; October: 46.5 points). According to final S&P Global data, the PMI rose to 49.7 points (flash: 48.8 points; October: 48.5 points).

The U.S. Purchasing Managers’ Composite Index increased to 54.9 points in November, based on final S&P Global data (flash: 55.3 points; October: 54.1 points), while the Services PMI rose to 56.1 points (flash: 57 points; October: 55 points). However, the ISM Services Purchasing Managers’ Index fell to 52.1 points (estimate: 55.5 points; October: 56 points).

The euro area’s gross domestic product grew by 0.9% year-on-year in the third quarter, in line with expectations and marking the best result since the first quarter of 2023. Compared to the previous three months, the euro area economy expanded by 0.4%, the strongest pace of growth in two years.

The euro area’s manufacturing sector continued to deteriorate in November, with the HCOB Eurozone Manufacturing PMI dropping to 45.2, signaling sharper contractions in production, new orders, purchasing, and inventories.

S&P Global’s Services Purchasing Managers’ Index (PMI) fell to 49.5 in November from 51.6 in October, according to final data. However, the decline was less pronounced than the preliminary PMI estimate of 49.2. The 50-point threshold is significant, as it separates growth in activity from contraction. The composite PMI, which combines manufacturing and services, dropped to 48.3 in November from 50.0 in October (flash estimate: 48.1), according to the final data.

What to watch out for this week

  • This week, investors will focus on the outcomes of several central bank meetings. Interest rate decisions are expected from the Reserve Bank of Australia (Tuesday), the Bank of Canada (Wednesday), and the Swiss National Bank. The ECB meeting (Thursday) is likely to draw the most attention, with markets anticipating a 25-basis-point rate cut, though a half-percentage-point cut remains a possibility. The primary focus will be on signs of economic weakness in the eurozone.
  • Also significant is Wednesday's U.S. inflation data, which may provide clues about the Federal Reserve's final meeting of the year, scheduled for next Wednesday.
  • Additionally, inflation data from Germany and Japan, as well as GDP figures from the UK, are due later in the week.

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