ADDX Go Market Morning Wrap - 19th Dec

 

Market Key Focus

US Market

- Markets

Previously, the market expected the Fed to continue to cut interest rates sharply next year, further boosting the rise of US stocks, but the Fed's cautious attitude caused US bond yields to soar, with the 10-year Treasury yield rising to more than 4.50% at one point, putting pressure on the stock market. After the release of the Fed's dot plot + economic expectations summary, risk aversion sentiment rose sharply, and US stocks plunged and closed near the daily low. When the daily low was refreshed, the Dow fell nearly 1,150 points, the S&P fell more than 3%, the Nasdaq fell more than 3.8%, and the small-cap stock index fell more than 5%

 

- Stocks

Tesla plunged more than 8%, and Micron Technology's financial report was released, and it fell more than 17% after the market closed.

Nvidia rose more than 4.8% and then closed down 1.14%. Citi maintained its "buy" rating on Nvidia and set its target price at $175, which means that Nvidia still has about 34% potential upside. It is estimated that by 2028, the total market size (TAM) of AI accelerators will reach $380 billion.

 

- Treasury

Before the release of the Fed's resolution statement, the yield on the 10-year U.S. Treasury bond fell by 0.99 basis points to 4.3889%. After the Fed's resolution was released and hinted at cautious interest rate cuts in the future, the yield on U.S. Treasury bonds soared. The yield on the 10-year U.S. Treasury bond once jumped 12 basis points to above 4.5%

 

- FX

The dollar index rose more than 1% to a two-year high

 

The dollar has risen sharply and has risen about 4% since the election

 

Asian Market

- Markets

In early trading on Thursday, Asia-Pacific stock markets fell across the board, with South Korean stocks opening sharply lower.

 

The Australian stock index fell 2%, the biggest drop in three months, Australian bond yields rose, the Nikkei 225 index opened 1.4% lower, and South Korea's Seoul Composite Index opened 2.3% lower and is currently down 2%.

 

- FX

The yen fell 0.80% against the dollar to 154.70 yen in late trading. Deutsche Bank believes that if the Federal Reserve shows a hawkish stance and the Bank of Japan keeps interest rates unchanged, the dollar/yen may rise to 157. Although the Bank of Japan's unexpected rate hike may boost the yen in the short term, accelerating inflation and slow central bank action are more likely to push up the dollar/yen.

Offshore RMB (CNH): The offshore RMB (CNH) fell 368 points against the US dollar to 7.3249 yuan in late trading.

 

European Market

- Markets

European stocks closed slightly higher on Wednesday, with stock indices in many countries rising as investors awaited the Federal Reserve's decision on rate cuts.

DAX 30 index closed down 0.02%. France's CAC 40 index closed up 0.26%. Britain's FTSE 100 index closed up 0.05%.

 

- Stocks

Renault, the French automaker and Nissan's largest shareholder, closed up 5.2%. It was reported that Renault and Honda were negotiating a merger, while Nissan rose more than 20% in Asian trading on Wednesday, its best single-day performance in more than 40 years.

Swiss food manufacturer Nestle's stock price fell 1.8% after it announced that it would launch a series of protein drinks in the United States to help suppress appetite.

UniCredit announced that its stake in Commerzbank has increased to around 28%

 

- Treasury

The market cut expectations for a rate cut in the UK, with the 10-year UK bond yield rising by more than 3bp, while the two-year German bond yield fell by more than 2bp

 

- FX

The euro fell 1.29% against the dollar to 1.0359, and the pound fell 1.04% against the dollar to 1.2578

 

Cryptocurrency Market

1. Fed Chairman Powell said at a press conference after the monetary policy meeting that the Fed has no intention of participating in any government plan to hoard large amounts of Bitcoin. Powell pointed out: We are not allowed to hold Bitcoin, such issues need to be considered by Congress, and the Fed is not currently seeking relevant legal changes.
2. Riot Platforms closed down 14.46%, Bitdeer Technologies closed down 8.58%, and Canaan Technology closed down 12.79%. Cryptocurrency exchange giant Coinbase closed down 10.2%, BTC Digital closed down 4.67%, and "Bitcoin holder" MSTR closed down 9.52%. The company's founder Michael Saylor said that the company is ready to launch a new Bitcoin purchase plan if necessary and create a smarter leverage strategy. He declined to comment on whether he had met Trump, but said he was willing to stay on the advisory board if the company asked.

 

Macro

1. The Fed cut interest rates by 25 basis points as expected, raised expectations for future policy interest rates and inflation, and expected only two rate cuts of 50bp next year, which was lower than previously expected. Powell "hawkishly" said that the Fed was cautious about rate cuts and stressed that new progress in fighting inflation must be seen. Some officials voted against rate cuts. U.S. bond yields and the dollar rose, non-U.S. currencies, gold prices and U.S. stocks plunged, and the Dow Jones Industrial Average fell by more than 1,100 points at one point, unable to escape the fate of a ten-day losing streak, the longest losing streak since 1974.
2. In the eurozone, the final value of the eurozone's November CPI was 2.2%, lower than expected, supporting the ECB's interest rate cut. The ECB has cut interest rates four times and hinted last week that it may cut interest rates further in 2025 because inflation is expected to return to the 2% target while economic growth remains weak. However, amid heightened uncertainty, no specific interest rate path was preset. Chief Economist Philip Lane reiterated this message on Wednesday, believing that it is prudent to maintain flexibility.

 

Stocks to Focus

1. Hindenburg claimed that it had shorted Sezzle (SEZL), a payment fintech company, and the company was temporarily suspended during trading due to excessive volatility, with a drop of 21.32% before the suspension
2. Oklo closed down 3.77%. Oklo, a nuclear power startup in which Sam Altman holds shares, and Switch, a data center operator, hope to deploy a series of 12 GW of new nuclear reactors by 2044. Oklo will be responsible for developing, building, and operating these small nuclear power plants and selling them to Switch through power purchase agreements.