Weekly market recap

Your weekly global financial market newsletter

  • The year-end wasn’t particularly favorable for stock markets, but they still posted strong gains for 2024. Commodities such as gold and U.S. natural gas also performed well, and the U.S. dollar remained strong.

Indices

Last week was not favorable for U.S. equities, as they recorded a five-day losing streak. However, Friday’s rally, driven primarily by gains in large technology companies, prevented even larger losses in the shortened week. Despite this, U.S. equities had a strong year overall. While there was no so-called Santa Claus rally this year (S&P 500 down 2.5% in December), the DJIA rose nearly 13% for the year, the S&P 500 gained over 25% for the second consecutive year (the best two-year streak in 25 years), and the Nasdaq 100 also rose nearly 25%, marking gains of over 20% for the sixth time in the past eight years.

European equities ended the week with mixed results as the year came to a close, and the full-year performance was similarly varied. Germany’s DAX led with a nearly 19% gain, while France’s CAC 40 Index fell by 2.15% in 2024. Over the past week, the pan-European STOXX Europe 600 Index edged up 0.20%, Germany’s DAX eased by 0.39%, France’s CAC 40 Index dropped 0.99%, and the UK’s FTSE 100 gained 0.91%.

US30
-0.60%
US100
-0.68%
US500
-0.48%
GER30
-0.39%

Commodities

The commodity markets were particularly buoyant last week, with oil prices rising to a two-month high due to cold weather in Europe and the U.S. Another contributing factor was investor optimism about Chinese economic stimulus measures, which could boost growth in the world’s largest oil-importing nation. The price increase was also supported by a decline in U.S. crude oil inventories, which fell by 1.2 million barrels to 415.6 million barrels. However, for the year as a whole, oil prices have fallen by more than 4%.

U.S. natural gas had one of its most successful years, with price rising by over 30%, marking its largest annual gain since 2016. By the end of the year, price approached a two-year high, driven mainly by forecasts of severe weather and strong global demand outside the U.S.

Gold also performed exceptionally well on an annual basis, rising more than 27% in 2024 and posting slight gains in the past week. However, December was not favorable for gold due to the strengthening U.S. dollar, which was significantly supported by Donald Trump’s election victory. Despite this, gold benefited from escalating geopolitical tensions, substantial central bank purchases, and monetary easing in both the U.S. and other advanced economies.

Gold
+0.68%
Silver
+0.91%
BRENT
+3.69%
NATGAS
-0.86%

Forex

The U.S. dollar reached a two-year high at the end of the year and appreciated by 6.5% over the full year 2024, marking its best annual performance since 2015. The primary driver of this rise is optimism about U.S. economic growth outpacing other economies. Contributing to this is Donald Trump’s re-election as president, which investors anticipate will boost growth and inflation. Additionally, the central bank is expected to adopt a more cautious approach to rate cuts, planning only two cuts of 25 bps each instead of the previously expected 100 bps reduction. Another significant factor, especially evident towards the end of the year, is capital inflows driven by the strong outperformance of U.S. equities compared to most other markets.

EUR/USD
-1.12%
USD/JPY
-0.35%
GBP/USD
-1.18%
USD/CAD
+0.27%

Macro

Last week was relatively light on data due to the turn of the year. On Monday, the U.S. released Pending Home Sales, which rose by 2.2% month-over-month in November 2024, surpassing forecasts of a 0.7% increase and following a downwardly revised 1.8% advance in October.

On Thursday, the final Purchasing Managers’ Indices (PMIs) for the manufacturing sector in both Europe and the U.S. were released. These confirmed continued contraction in manufacturing on both sides of the Atlantic, with worse-than-expected numbers from Germany, the UK, and the eurozone. In the U.S., figures exceeded expectations but remained below the 50 mark, indicating contraction.

A positive note came from initial jobless claims, which dropped to 211,000 for the week ending December 28, down from the previous week’s 220,000 and marking the lowest level in eight months.

What to watch out for this week

  • News from the U.S. labor market will play a major role in the week ahead. On Tuesday, we will see the JOLTS job openings statistics, followed by the ADP private sector employment report on Wednesday. Thursday will bring the regular weekly report on initial and continuing unemployment claims. The end of the week will then bring the most important data from the US labour market in the form of non-farm job creation and the unemployment rate.
  • Additionally, we can expect a series of Purchasing Managers' Indices (PMIs) for the services sector and composite indices in both Europe and the U.S. Overall, these should confirm slight expansion, with indices remaining above the 50 mark.
  • Inflation data from Germany and the euro area will also be worth watching, as it is expected to trend higher towards the end of the year.

Disclaimer

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