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The Dow Jones index (US30) was down 0.36% at Thursday’s close. The S&P500 Index (US500) decreased by 0.22%. The Nasdaq Technology Index (US100) fell by 0.17%. The weakness in mega-cap stocks of Tesla and Apple has impacted the broader market. On Thursday, Tesla shares fell more than 6% after the company reported lower-than-expected vehicle deliveries in Q4. Additionally, Apple fell more than 2% after Reuters reported that the company is offering discounted smartphones in China due to growing competition from domestic rivals such as Huawei. 

The US weekly jobless claims unexpectedly fell by 9,000 to an 8-month low of 211,000, indicating a stronger labor market than expected rise to 221,000. The US construction spending in November was unchanged m/m, weaker than expected at 0.3% m/m. Markets rate the odds of a 25 bps rate cut at the January 28-29 FOMC meeting at 11%.

Low volumes and thin trading conditions this holiday week could lead to exaggerated moves in equities. Markets await Friday’s US Manufacturing PMI data for December to determine the market’s direction and gauge the health of the US manufacturing sector. The Manufacturing PMI for December is expected to decline by 0.2 to 48.2.

S&P Global’s Canadian Manufacturing PMI rose to 52.2 in December 2024 from 52 in November, beating market estimates of 51.9. This marked the strongest increase in manufacturing activity since February 2023 and the 4th consecutive month of growth, driven by higher output, new orders, and continued employment growth.

European markets were mostly rising on Thursday. Germany’s DAX (DE40) rose by 0.58%, France’s CAC 40 (FR40) closed 0.18% higher, Spain’s IBEX 35 (ES35) gained 0.71%, and the UK’s FTSE 100 (UK100) added 1.07% yesterday. The S&P Eurozone Manufacturing PMI for December was revised down 0.1 to 45.1 from the previously reported 45.2. Swaps discount the odds of a 25 bps ECB rate cut at the January 30 meeting and a 12% chance of a 50 bps rate cut at this meeting. Yannis Stournaras of the European Central Bank’s Governing Council said borrowing costs will likely be cut to 2% around this fall. His forecast aligns with economists and investors who believe the ECB will ease monetary policy at every meeting until mid-2025 as inflation stabilizes at 2% and the region’s economy struggles.

Silver (XAG/USD) prices climbed above $29.50 per ounce on Friday, recovering from near four-month lows, while gold prices rose as ongoing geopolitical and economic uncertainty fueled demand for the precious metals. In addition, policy uncertainty surrounding the Trump administration’s rise to power has also fueled inflows into safer assets.

Crude oil inventories (WTI) fell by 1.178 million barrels, which was less than market expectations of a 2.75 million barrel decline. This was the sixth consecutive decline in crude oil inventories, refuting recent statements that weak demand for the fuel in the coming year would lead to a continued surplus in the crude oil market. 

The US natural gas (XNG/USD) prices rose by 3% to $3.7 per mmbbl thanks to increased supplies at liquefied natural gas (LNG) export plants and forecasts of colder weather and higher heating demand over the next two weeks. In addition, gas flows to the country’s eight major LNG export plants are rising and are expected to continue to rise, especially after the expiration of a deal allowing Russia to ship gas to Europe via Ukraine. Natural gas inventory data is expected today.

Asian markets traded flat on Thursday. Japan’s Nikkei 225 (JP225) was not trading, China’s FTSE China A50 (CHA50) decreased by 2.75%, Hong Kong’s Hang Seng (HK50) was down 2.18%, and Australia’s ASX 200 (AU200) was up 0.64%. 

China’s central bank (PBoC) announced on Friday that it will prioritize interest rate adjustments over quantitative measures of credit growth. The initiative is part of a broader interest rate reform program that government advisers have called a “difficult task.” In late September, China’s seven-day reverse repo rate was cut from 1.7% to 1.5%, the lowest level since at least 2012, to stimulate economic activity.

• S&P 500 (US500) 5,868.55 −13.08 (−0.22%)
• Dow Jones (US30) 42,392.27 −151.95 (−0.36%)
• DAX (DE40) 20,024.66 +115.52 (+0.58%)
• FTSE 100 (UK100) 8,260.09 +87.07 (+1.07%)
• USD index 109.25 +0.77 (+0.71%)
   

News feed for: 2025.01.03

• German Unemployment Rate (m/m) at 10:55 (GMT+2);
• US ISM Manufacturing PMI (m/m) at 17:00 (GMT+2);
• US Natural Gas Storage (w/w) at 17:30 (GMT+2).

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