ADDX Go Market Morning Wrap - 31st Dec

 

 

Market Key Focus

US Market

- Markets

The U.S. stock market performed weakly in the closing week of 2024. When the U.S. stock market hit a new low in the morning, the Nasdaq fell as much as 1.9%, the S&P 500 fell as much as 1.7%, and the Dow fell as much as 729 points, or 1.7%. $TSLA closed down 3.3%, and $NVDA fell nearly 2.2% before closing up 0.35%. Despite the poor performance at the end of the year, the S&P rose about 24% for the whole year, and the Dow rose about 13%, both of which were the best since 2021. The Nasdaq rose nearly 30%, the longest quarterly consecutive increase since 2021.

 

After the opening of the U.S. stock market, the main stock index fell nearly 2%. Buyers rushed in after the European market closed, and the strongest selling pressure appeared again before the closing of the U.S. stock market

 

- Treasury

As inflation and employment data have remained strong in recent months, investors have lowered their expectations for the Fed to cut interest rates. The 10-year Treasury yield has risen sharply in the fourth quarter from 3.8% in early October. The bond market will close early on Tuesday, Eastern Time, and will be closed all day on Wednesday.

 

- FX

The U.S. dollar index continued to strengthen, rising by about 0.1%, close to a two-year high, and has risen by 6.7% this year.

 

 

Asian Market

- Markets

The Nikkei 225 opened lower, reflecting global concerns over economic growth and profit-taking before the New Year holiday. Investors are cautious ahead of upcoming economic data releases and geopolitical developments.

 

Chinese markets are showing mixed performance as investors weigh the impact of recent government policies aimed at boosting the economy. Sentiment remains cautious due to concerns about the real estate sector and slower-than-expected recovery.

 

The Hang Seng Index is trending slightly upward, supported by gains in tech stocks.

However, the market remains volatile due to global macroeconomic uncertainties.

 

The KOSPI opened flat, with technology and automobile sectors seeing mixed performance.

Investors are awaiting updates on export data and global demand trends.

 

Indian markets are expected to open lower, tracking weakness in global equities.

Profit-taking is likely ahead of the year-end, but gains in IT and banking stocks may provide some support.

 

The ASX 200 is slightly down as energy and mining stocks face selling pressure.

 

- FX

The Japanese yen rebounded slightly after hitting a five-month low, rising above 157

Some analysts believe the yen could benefit as the Bank of Japan is likely to raise interest rates next year while the Federal Reserve eases monetary policy. To support the currency, the Bank of Japan may want to start raising rates more aggressively, said Fawad Razaqzada, market analyst at City Index.

 

European Market

- Markets

On the last full trading day of 2024, European stock markets ended with a decline. The pan-European Stoxx 600 index fell 0.46%, and most industry sectors closed lower. Technology, industrial and media sectors led the decline, while the oil and gas sector rose against the trend. The Stoxx 600 index has risen by about 5.5% this year, significantly lagging behind the US stock market.

 

- Treasury

Germany's 10-year bond yield fell 2.9bp to 2.367%. The two-year German bond yield fell 1.8bp. The UK's 10-year bond yield fell 2.4bp. The two-year British bond yield fell 1.7bp.

 

- FX

The euro has fallen 5.7% against the dollar this year, while the pound has fallen 1.2%.

 

Cryptocurrency Market

Bitcoin futures, fell 2.67% to $92,765.00 in late trading. The U.S. stock market rebounded after refreshing the day's low in the early trading, and the spot $BTC price returned to $94,000 in late trading.

The $ETH fell 0.49% to $3,353.00 in late trading

 

Bitcoin futures fell to $91,735

 

Macro

1. The US economic data was mixed. The November existing home sales index hit a new high since the beginning of 2023, with a month-on-month increase exceeding expectations, but the Chicago PMI unexpectedly fell to 36.9, lower than the market expectation of 42.2. The US credit card default rate reached its highest level since the 2008 financial crisis in the first nine months of 2024.
2. Spain's inflation rate unexpectedly rose, with the EU coordinated inflation rate rising to 2.8% in December, higher than expected, and the core inflation rate excluding fresh food and energy prices rose by 2.6% year-on-year. Inflationary pressure in Spain still exists, which may affect the ECB's monetary policy decision. ECB board member Holzmann said that the ECB may slow down the pace of interest rate cuts as inflation remains stubborn. Board member Stournaras said the pace of interest rate cuts should be gradual.
3. On December 31, the China National Bureau of Statistics released data showing that the manufacturing PMI in December was 50.1%, down 0.2 percentage points from the previous month, and remained above the critical point for three consecutive months. The non-manufacturing business activity index and the comprehensive PMI output index were both 52.2%, up 2.2 and 1.4 percentage points from the previous month respectively. The prosperity level has improved significantly, and the three major indexes are all in the expansion range.

 

Stocks to Focus

1. $BA closed down 2.31%. Boeing 737-800 aircraft have recently suffered frequent safety accidents
2. Internet service provider $VRSN closed up 0.56%. Berkshire Hathaway, owned by Buffett, became the company's largest shareholder
3. $FFIE closed up 78.41%. The company previously announced the completion of a new round of financing of US$30 million.
4. Fannie Mae once rose 24%, and Freddie Mac once rose 21%, both of which were the largest intraday gains since mid-November, because Bill Ackman's post triggered market expectations that the two companies might be privatized under the Trump administration.