Market Recap: Stocks, Bonds open 2024 in the red!

Economic Indicators & Central Banks:

Data in the US included stronger than expected construction spending and weaker than forecast S&P Global manufacturing PMI.
Fed funds futures have slipped to kick off 2024 as some of the aggressive rate cut bets are trimmed. However, the market is still pricing in close to 6 quarter point cuts. No action is expected for the first FOMC meeting on January 31.

Market Trends:

Treasuries and Wall Street opened 2024 in the red and it basically went downhill from there. Treasury yields climbed 5- to 8- bps, led by the front end.
A heavy corporate calendar exacerbated the losses from spillover from losses in European bonds, profit taking on the late 2023 rally, and from trimming of Fed rate cut bets.
Stocks:  The US100 dropped -1.63% paring some losses as the indexes finished off their lows. The US500 was -0.57% in the red, while the US30 was fractionally higher.
Moderna shares surged 15.5% after investment bank Oppenheimer upgraded its stock.
Apple lost 3.6%, its worst day in 5 months  after Barclays downgraded its shares, Nvidia and Meta Platforms both fell more than 2%. Lack of new features and Iphone upgrades affected Apple stocks.

Financial Markets Performance:

The USDIndexretested 102. The buck is on course for a 3rd straight daily rise, with technical factors as well as risk aversion likely to add support.
EURUSD has dropped sharply to 1.0937 and GBPUSD dropped to 1.2610. USDJPY nudged up to 142.43 in thin trade, as Japanese markets remain closed.
Gold declined to $2058 from the $2062.98 close on December 29. Global risks and the weaker US Dollar supported gold prices into year-end and an all-time closing high of $2077.49 on December 27.
Bitcoin extended above 45K supported by statements that Blackrock & JPMorgan anticipate an imminent spot Bitcoin ETF approval and Goldman Sachs issuing huge 2024 Crypto Prediction.
Today: Germany unemployment, US FOMC minutes, ISM Manufacturing and US Job openings.
Key Mover: Oil prices slumped to $70.30 after an intraday peak of $73.64 amid concerns over events on the Red Sea. The escalating tensions in the Middle East are fueling concern that supply may be disrupted.

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Andria Pichidi

Market Analyst

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