Thursday's Markets Update (December 26, 2024)

28 Dec 2024 by rate3

On Thursday, equities marginally recovered after the Christmas holidays. Although the market is still driven by tech performance and expectations of continued AI growth, its optimism was visibly shaken by politically motivated Fed actions, which undermined its previous dovish stance. Additionally, the money supply (M2) is almost at an ATH as a result of increasing throughout 2024, pointing to stagflation. The South Korean won plunged to a 16-year low amid growing calls for the president's impeachment, while the Turkish lira hit an ATL as the country entered into a technical recession. Furthermore, France's unemployment rose to a two-year high as Spanish producer prices started to grow for the first time in 20 months. BTC stumbled, falling back to 95K as traders suddenly sold off the recent spike, casting doubts on the Santa rally, while ETH lowered to 3.3K.

Details

Initial jobless claims fell to 219K in the second week of December, lower than expected. This suggests a tight labor market, aligning with the Fed's assessment. However, outstanding claims rose, indicating a longer job search duration. 1Y trend: "Up". (DOL)
Money Supply M2 increased slightly to $21,221.20B in September (average: $5,389.55B since 1959; ATH: $21,723.20B in April 2022; ATL: $286.60B in January 1959). (Fed)

Crypto

Over 15 million South Koreans, representing more than 30% of the population, now hold cryptocurrency. This surge follows the US presidential election and Trump's pro-crypto stance. Crypto holdings and daily transaction volumes have significantly increased, approaching stock market levels. (source)

World Markets

Producer prices in Spain rose 0.9% YoY in November, ending a 20-month decline. Energy prices rebounded, while costs for capital and consumer goods also increased. On a monthly basis, producer prices surged 2.7%. 1Y trend: "Up". (INE)
Unemployment in France rose sharply in November 2024, reaching its highest level since August 2022. The increase was most pronounced among core-aged workers. 1Y trend: "Up". (Dares)
The Turkish lira hit a record low (35.2), plunging 16.3% in 2024. Weak economic growth, aggressive interest rate cuts by the central bank, and reduced currency interventions contributed to the lira's decline. Turkey entered into the technical recession in Q3.

Currencies

The South Korean won plunged to a 16-year low amid escalating political turmoil. The impeachment of acting President Han Duck-soo and a hawkish Fed are weighing heavily on the currency. 1Y trend: "Up"