The S&P 500 index finished the week little changed, while the Nasdaq added 0.48%. The Russell 2000 Index performed worst, declining 0.86%, followed by the Dow, which shed 0.67%. Equities started the week broadly lower but reversed course toward the end of the week, supported in part by an encouraging US inflation report as well as strong earnings results from semiconductor manufacturer Micron Technology that seemed to help shift AI-related sentiment. On the macro side, US unemployment rate rose to 4.6% in November, the highest level in over four years while US core inflation dropped to slowest pace since early 2021. December business activity growth slowed to a six-month low. US Treasuries yields generally decreased across most maturities. In Japan, BoJ delivered widely expected rate hike rom 0.50% to 0.75%, its highest level since 1995. The yield on the 10-year Japanese government bond rose to 2.01%, from 1.95% at the end of the previous week. Given limited indications about when the bank could next raise rates, the yen weakened to around JPY 157.3 against the U.S. dollar, from about JPY 155.8 at the end of the prior week. The Nikkei 225 index was up on the news but ended the week lower. The STOXX Europe 600 Index was up 1.60% over the week while the ECB left rates unchanged. Gold and Silver surged to new record closing highs this week. Bitcoin had another wildly volatile week to end just marginally lower for the third week in a row (7th of last 8 weeks down).
Have a great weekend
Merry Christmas and Happy New Year
Charles & Syz Research Lab