Thursday's Markets Update (January 11, 2024)

11 Jan 2024 by rate3

On Thursday, The Nasdaq, S&P 500, and the Dow Jones turned negative as investors processed a CPI report showing higher headline inflation but a lower core rate. Bets for a rate cut decreased, with utilities as the worst-performing sector. Apple and Tesla fell, while Microsoft's gain made it the most valuable US company, overtaking Apple. JPMorgan, Bank of America, Wells Fargo, and Citigroup were in the red.

In the crypto market, Bitcoin briefly surged above $49K before dropping below $47K on the first trading day after the SEC approved the first spot bitcoin ETFs, ranging from BlackRock to Ark Invest. Concurrently, Ethereum soared to $2.7K on traders' expectations of an SEC-approved spot Ethereum ETF, despite repeated government denials.

Details

The inflation rate rose to 3.4% YoY in December, driven by slower decreases in energy prices and a rise in food pricing as well as a softening in the pace of price increases for various goods and services. Core inflation eased, while consumer prices (CPI) overall increased by 0.3% compared to the previous month.
The core inflation rate, excluding food and energy, declined to 3.9% in December, the lowest in over two years. The shelter index, a significant component, slowed to 6.2%, and other indexes showed modest increases. Core consumer prices increased by 0.3% monthly, aligning with market expectations.
According to DLS, US jobless claims dropped to 202,000, below expectations, and continuing claims fell to 1,834,000, indicating a tight labor market that could support the Fed's continued hawkish approach to combat inflation. Seasonal factors caused unadjusted claims to rise.

Crypto

The SEC approved 11 Bitcoin spot ETFs, with BlackRock's iShares Bitcoin Trust (IBIT) gaining attention due to the firm's stature and recent Bitcoin investments. IBIT opened at $28.05 but fell over 4%. (source) Its price saw a 24-hour volatility above 11% . While the ETFs mirror Bitcoin's spot market moves, with BTC hitting $48,965 before pulling back, investors watch closely after anticipating institutional capital post-approval. The market response to these ETFs remains a point of global interest.

World Markets

China's vehicle sales rose 23.5% in December 2023 (source China Association of Automobile Manufacturers), with annual sales exceeding 30 million for the first time; NEV sales surged 46.4% for the month, contributing 31.6% to the year's total.
European equity markets closed lower due to higher-than-expected US inflation, raising doubts about a potential interest rate cut. Banks and luxury sector stocks were among the biggest losers. Grifols also experienced a significant decline after addressing a short-seller report.
Mexico's industrial production growth slowed (according to INEGI) to 2.8% in November 2023, below expectations and the weakest since April, with declines in mining and manufacturing and slower growth in utilities and construction. Monthly output fell by 1%.

Commodities

According to the latest spot benchmarks from sellers to buyers priced in megawatts per hour (MWh), the price of electricity in Italy has increased to 113.26 by 2.20 EUR/MWh or 1.98% since the start of 2024. It is worth noting that the Italy Electricity Price reached its highest point ever recorded at 815.57 in September 2022. This information is sourced from GME.