SVET Reports
Tuesday's Markets Update (January 2, 2024)
On Monday, Nasdaq and other stock indexes started 2024 in red after a strong 2023 as traders continue to fix their gains. Investors are assessing economic and monetary policy ahead of releases this week. Tech stocks, particularly Apple, performed poorly due to rising Treasury yields and a downgrade by Barclays. Tesla was flat despite beating delivery estimates.
Also, the majority of World's main stocks indexes (including, Shanghai Composite, JP225, FTSE 100, CAC 40, Ibovespa and JSE All) were in red with exception of German's DAX 40 and Italian IT40 which went flat.
At the same time, BTC rose sharply, breaking the 45K barrier, with ETH and other alts still lingering below their key resistance levels.
Details
The S&P Global US Manufacturing PMI for December was revised down to 47.9, indicating a worsening in manufacturing conditions. Output, new orders, and employment decreased while input buying, inflation, and selling prices increased. Despite this, business confidence improved slightly.
Currencies
The dollar index held above 102, supported by a rebound in Treasury yields, selloff on Wall Street, and heightened geopolitical tensions in the Middle East. Investors scaled back bets on the scale of interest rate cuts from major central banks this year. The dollar strengthened across the board, with the most pronounced buying activity seen against the kiwi and the euro, ahead of key US jobs data and the latest Federal Reserve policy meeting minutes.
World Economy
China: the Shanghai Composite rose slightly while the Shenzhen Component fell as mainland stocks struggled for direction amid weak global sentiment. A private survey showed that China's manufacturing sector growth unexpectedly accelerated in December, contrasting with official data indicating contraction.
Germany: the DAX 40 pared back early gains to trade near the flat line at 16,760 points as bond yields rose and investors awaited key data. The index had earlier risen to an all-time high amid hopes of interest rate cuts. Siemens and Allianz reached all-time and over two-decade highs, respectively. Sartorius, Fresenius, and Commerzbank were the top performers.
Britain: the FTSE 100 closed 0.2% lower at 7,721 as markets assessed the validity of looser monetary policy for the year. Insurers, including Prudential, were among the sharpest losers. Food inflation slowed in December, strengthening hopes of disinflation and looser financial conditions. Shares for key grocery chains, including Marks & Spencer and B & M, booked gains.
France: the CAC 40 index closed 0.16% lower at 7,531 due to a global bond yield rally and caution ahead of key Euro Area inflation data and the US jobs report. Rising oil prices and inflationary fears weighed down tech and luxury shares, including Dassault Systèmes and Pernod Ricard. Losses were partially offset by a 3.1% rise in TotalEnergies.
Brazil: the Ibovespa fell 0.7% to below 133,100 as future interest rates rose, reducing risk appetite. Stubborn inflation and steady GDP growth reduced urgency for Selic rate cuts, causing the consumer discretionary sector to drag the index down. Gol and Atacadao performed the worst. Commodity-linked giants Petrobras and Vale limited the decline due to rising oil benchmarks and iron ore prices.
South Africa: the JSE All Share index fell 1.5% to 75,709 due to rising oil prices and mixed Chinese data, negatively impacting heavyweight resource-linked shares. Impala Platinum, Gold Fields, and Exxaro Resources were the biggest laggards. RMB Holdings was the only winner, rising 4.6%.