U.S. stocks declined during the holiday-shortened week. The Nasdaq Composite performed worst for the week, followed by the Russell 2000 and S&P 500 indexes. The Dow Jones Industrial Average and S&P MidCap 400 Index held up best but still shed 0.67% and 0.71%, respectively. Within the S&P 500 Index, the energy sector outperformed as heightened geopolitical tensions drove oil prices higher. On the US macro side, lower mortgage rates and wage growth fuel homebuyer momentum, as pending home sales Index rose 3.3% in November, marking the largest month-over-month jump since February 2023. Jobless claims were lower for third straight week, totaling 199,000, a decrease of 16,000 from the prior week’s revised level. On Tuesday, publication of Fed minutes revealed a slightly more hawkish bias than expected. Market reactions to the minutes were muted, the probability of a January rate cut remaining around 15%. U.S. Treasury performance was mixed, with shorter-term yields changing little and longer-term yields generally increasing. In local currency terms, the pan-European STOXX Europe 600 Index hit a new high during the week and ended 1.26% higher, buoyed by an improving economic backdrop. Japan’s Nikkei 225 Index fell 0.8% during the week, as JGB yield hit highest level since 1999. Precious metals were volatile, with Gold failing to cross the $4400 level. Crypto markets were strong to start the year with bitcoin hitting $90k.
Have a great start of the year.
Charles & Syz Research Lab