InvestMacro

By JustMarkets

At Friday’s stock market close, the Dow Jones (US30) index decreased by 0.06% (for the week +0.91%, for the year +13.74%), while the S&P500 (US500) index was down 0.28% (for the week +0.33%, for the year +24.73%) on Friday. The NASDAQ Technology Index (US100) closed negative on 0.56% on Friday (for the week +0.03%, for the year +44.52%).

Hawkish comments from former US Treasury Secretary L. Summers on Friday lent support to the dollar when he said “..there’s not going to be as much room for the Fed to ease as people are hoping.” Indeed, while there is a sense of optimism about the US inflation outlook in the second half of 2023 following encouraging CPI and Core PCE reports, it is premature to declare victory. Any pause in or reversal of the underlying trend in consumer prices next year could be a disaster for sentiment, leading to a revision of interest rate expectations to a hawkish approach. The Fed’s dovish stance is a clear signal that officials want to change policy in time to ensure a soft landing; in other words, they favor growth over inflation. However, the vector could shift in the dollar’s favor by the end of the first quarter if additional data becomes available to better assess the macroeconomic picture. Any acceleration in growth would boost employment and labor market rigidity, putting upward pressure on wages. In such an environment, inflation could be well above the 2.0% target, while maintaining an upward trend.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 0.30% (for the week +0.51%, for the year +19.07%), the French CAC 40 (FR40) gained 0.11% on Friday (for the week -0.18%, for the year +14.38%), the Spanish IBEX 35 (ES35) added 0. 16% (for the week +0.36%, for the year +20.70%), the British FTSE 100 (UK100) closed positive on the last day of last year on 0.14% (week ended +0.23%, for the year +2.37%).

According to the European Commission’s forecast, Germany’s GDP will contract by 0.4% in 2023, while France and Italy will grow by 1% and 0.9% respectively. At the moment, analysts are forecasting lower inflation and eurozone GDP growth for 2024 in the range of 1-1.3% y/y, which is higher than the current year. The first half of next year is likely to be challenging, with high-interest rates and global geopolitical instability limiting the outlook for the EU economy.

Crude oil gave up early gains on Friday and suffered minor losses as weaker-than-expected economic news from the US added to concerns about energy demand. Rising Russian oil exports are weighing on crude prices. Vortexa tanker tracking data monitored by Bloomberg shows that the four-week average of refined product shipments from Russia rose to 2.6 million bpd in the four weeks through December 24, up 157,000 bpd from the previous week and the highest in seven months.

The geopolitical situation in the Middle East is heating up. At least twenty-six merchant ships have been attacked or approached in Yemen by Iran-backed Houthi militants in the Red Sea since Israel’s war with Hamas began in October. In addition, fears that the war between Israel and Hamas could spill over into the wider Middle East are helping to push oil prices higher after the US military struck three sites in Iraq on Monday targeting an Iranian-backed terrorist group blamed for a series of drone attacks on US troops.

supportive factors were the Bank of Japan’s soft stance and optimism about the Indian economy. On the other hand, Chinese blue-chip stocks performed the worst in the region as lingering concerns over the country’s economic recovery led investors to pull out of local markets.

The Japanese index JP225 was the top performer in 2023. Japanese equities were supported by improving corporate results as well as growing optimism that the Bank of Japan may finally end its ultra-easy monetary policy after decades of near-zero interest rates. On the other hand, Hong Kong’s Hang Seng Index (HK50) was the worst-performing major index in the region, having declined for four consecutive years. The fall in the FTSE China A50 (CHA50) also indicates that China’s economic recovery is not going well. The Chinese economy has been hampered by a slump in real estate prices and local government debt problems, which has affected spending and reduced demand and investment in the manufacturing sector. Despite this, economists believe that the outlook for Asia remains bright as Asia continues to enjoy strong growth, especially in India. Their view is supported by the International Monetary Fund, which expects Asia to grow by 4.6% in 2023 and 4.2% in 2024, compared to the global growth forecast of 3% in 2023 and 2.9% in 2024.

The Singapore dollar has outperformed all of its Asian peers over the past two years. The Central Bank’s chance to take the lead in the region for the third consecutive year remains in the central bank’s sights. The currency gained 1.5% in 2023 as the Monetary Authority of Singapore (MAS) maintained its policy range with a bias toward rate hikes at its April and October meetings to counter inflation. Economists predict the MAS will maintain this regime again this year, with some even expecting further policy tightening if inflation proves intractable.

S&P 500 (US500) 4,769.83 −13.52 (−0.28%)

Dow Jones (US30) 37,689.54 −20.56 (−0.06%)

DAX (DE40)  16,751.64 +50.09 (+0.30%)

FTSE 100 (UK100) 7,733.24 +10.50 (+0.14%)

USD Index  101.38 +0.05 (+0.05%)

• – US Richmond Manufacturing Index (m/m) at 17:00 (GMT+2).
• – Caixin Manufacturing PMI (m/m) at 03:45 (GMT+2);
• – Germany Manufacturing PMI (m/m) at 10:55 (GMT+2);
• – German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+2);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

RoboMarkets, a European financial brokerage and the creator of the R StocksTrader trading platform, has announced its industry award win at the Professional Trader Awards event. The R StocksTrader mobile application was acknowledged as the “Best Mobile Trading Platform (Europe)” in the European region for 2023. The winners were chosen by the community of professional traders.

For the fourth consecutive year, RoboMarkets has been the winner in the Best Mobile Trading Platform category. This accolade is given to the company that offers the best mobile product in the professional trading account market.

R StocksTrader is an innovative trading platform, featuring robust software for trading stocks and other financial instruments with extensive functionality. The platform offers access to over vast number of instruments, automated strategy creation, and more. Key features include:

• Access to global markets on a single platform
• A minimum deposit of $100 USD
• Leverage up to 1:20
• Access to over 3,000 stocks and ETFs
• Over 1,000 stocks with 0% commission and no hidden costs

The Professional Trader Awards 2023, organized by Holiston Media, celebrated its fifth year by highlighting brokers who provide excellent service to their clients. The event, which witnessed over 200 nominees across 17 categories and received more than 11,500 public votes, recognized the highest standards in trading analysis, platforms, execution, technology, and customer service. The winners were announced at an exclusive award winner’s lunch in London on December 7, 2023.

About RoboMarkets

RoboMarkets is an investment company, operating under CySEC licence No. 191/13. RoboMarkets offers investment services in European countries by providing access to its proprietary trading platforms to traders who work on financial markets. Find out more about the Company’s products and activities on www.robomarkets.com.

“Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69.88% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.”

By ForexTime

This year has seen its share of surprises and shockers, to say the least.

Investors and traders had to battle with a US and European banking crisis in March, the outbreak of the Israel-Hamas war in October, all while contending with the uncertainties over the Fed’s next policy moves.

Yet, many assets and instruments were able to move beyond the negative headlines to punch their way up to record highs!

As the curtains come down on 2023, we highlight 3 major assets that had a year to remember:

1) XAUUSD

On December 4th, briefly spiked to $2147.14 which was a new record high for spot gold!

This surpassed gold’s previous all-time peak of $2074.87, registered on August 7th, 2020, when the Fed kept its benchmark rates near-zero amid the economic turmoil from the Covid-19 pandemic.

Also, on December 27th, the precious metal secured its highest-ever daily closing price of $2077.16.

What drove XAUUSD to a new record high?

Markets are getting excited about the prospects of Fed rate cuts in 2024.

Note that the prospects of lower US interest rates (and a weaker US dollar/lower US Treasury yields) are a boon for gold.

After all, gold does not pay interest to investors who hold on to the precious metal.

In other words, lower interest rates make gold more attractive as a place to invest in.

At the time of writing, gold is set to close out 2023 with an annual gain of over 13%.

As long as the Fed can trigger the forecasted rate cuts, that should boost gold’s chances of reaching even higher heights in 2024!

2) NVIDIA

The stocks for this US chipmaker secured a daily close above the psychologically-important $500 line for the first time in its history on November 20th.

However, after posting an intraday record high of $505.46, it was unable to maintain such lofty heights.

The stock faltered and eventually found support around its 50-day simple moving average (SMA), before relaunching another attempt to retake the $500 level as we tip over into the new year.

To be clear, it’s been a great year overall for US stocks.

There were also record highs for the likes of:

• NQ100_m (which tracks the Nasdaq 100 index)
• WSt30_m (which tracks the Dow Jones Industrial Average index)
• Apple

However, Nvidia takes the cake and is being singled out among its US peers, in light of its stunning year-to-date gains of nearly 240%!

What drove NVIDIA to a new record high?

The artificial intelligence craze has made Nvidia the best-performing member on both the S&P 500 and Nasdaq 100 indices.

Nvidia stands out from the crowd in having already produced very real profits from the AI-mania, as opposed to mere hype.

Nvidia’s graphics processing units (GPU) are a crucial component for companies that are looking to build their own AI products and services.

And of course, the prospects of US interest rates moving lower in the new year is also adding to the overall cheer for broader US stock markets as well.

As for the 2024 outlook, Wall Street is forecasting a further 31.7% climb for Nvidia over the next 12 months.

Outside of the US, European stock indices also had a stellar year!

There were record highs for the likes of:

• FCHI40_m (which tracks France’s benchmark CAC 40 index)
• SPN35_m (which tracks Spain’s benchmark IBEX 35 index)
• STOX50_m (which tracks Europe’s blue-chip EURO STOXX 50 index)

But for this article, we zoom in the benchmark stock index for the Eurozone’s largest economy …

3) GER40_m

On December 14th, Germany’s benchmark stock index hit an all-time high of 17,018.0.

That was 2.9% higher than its previous record high of 16,537.5 set at end-July 2023.

However, it has eased slightly lower since, now settling around its 14-day simple moving average (SMA) for support.

Still, the GER40_m index is set to claim a 20% gain for all of 2023!

What drove GER40_m to a new record high?

Here are two main factors:

• Hopes for ECB rate cuts

At the time of writing, markets are betting on a 70% chance that the ECB could cut its rates as soon as March 2024.

Stocks tend to rejoice at the thought of lower interest rates, which makes it cheaper to borrow money to fuel the company’s growth, while shoring up economic growth.

• Cheaper valuations

The DAX’s price-to-earnings (PE) ratio still stands at a mere 12.49, despite the recent record high for Germany’s benchmark stock index.

That 12.49 number is lower compared to the S&P 500’s PE ratio of 21.97 and the Nasdaq 100’s PE ratio of 30.33.

The lower the PE ratio, the “cheaper” the asset.

And that has made German stocks more appealing for investors who realize they can access a greater share of the earnings for every euro invested into stocks that make up the DAX index.

As for the 2024 outlook, it could be a choppy year for the European stock indices amid forecasts for a recession.

Still, if the Ger40_m can battle past such fears, new record highs may well be ahead.

Analysts are predicting up that Germany’s benchmark stock index could be as much as 13% higher by this time next year!

So there you have it!

So many assets found fresh all-time peaks in 2023, rewarding investors and traders that anticipated higher prices along the way.

Could there be new record highs for other assets in the new year?

Find out via our 2024 outlook, which is set to be published in the first week of the new year!

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) increased by 0.14%, while the S&P 500 Index (US500) was up by 0.04%. The NASDAQ Technology Index (US100) closed negative by 0.03% on Thursday. The Dow Jones Industrials (US30) and NASDAQ (US100) indices hit all-time highs yesterday. Expectations that the Federal Reserve will begin cutting interest rates early next year continue to support stocks, keeping the Santa Claus rally alive.

Economic news is also contributing to the rally in stock indices. US weekly initial jobless claims rose by 12,000 to 218,000, indicating a weak labor market versus expectations of a rise to 210,000. US home sales for November were unchanged m/m, weaker than expectations of a 0.9% m/m increase.

Tiff Macklem, Governor of the Bank of Canada, has recently started to acknowledge that a rate cut could come in the new year, despite constant warnings that the central bank is ready to raise rates again if progress in curbing inflation stalls. Economists say the path of inflation toward the central bank’s 2% target could be bumpy, which could push back the timing of next year’s interest rate cut. In his year-end speech, Macklem told Canadians that 2024 will likely be a “year of transition.” He warned that the coming quarters will be “difficult for many” as growth slows and consumers are forced to rein in their spending.

European equity markets declined from multi-year highs on Thursday. There has been profit taking in the final days of the year. Germany’s DAX (DE40) fell by 0.24%, France’s CAC 40 (FR40) lost 0.48% yesterday, Spain’s IBEX 35 (ES35) decreased by 0.35%, and the UK’s FTSE 100 (UK100) closed negative by 0.03%.

ECB Governing Council spokesman Holzmann said it is too early for the ECB to think about cutting interest rates now, and there is no guarantee of a rate cut in 2024.

Crude oil (WTI) and gasoline prices fell sharply on Thursday, with crude falling to its lowest in a week and gasoline falling to a 2-week low. Concerns over slowing energy demand growth in China have weighed on crude oil prices. China Petroleum and Natural Gas Chemical Corporation (Sinopec) forecasts that demand growth for petroleum products in China will slow to 1.7% in 2024 from 16.1% in 2023.

Natural gas (XNG) prices rose sharply on Thursday after weekly US natural gas inventories fell more than expected. The EIA reported that natural gas inventories fell by -87 billion cubic feet last week, more than the expected 79 billion cubic feet.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down by 0.42%, China’s FTSE China A50 (CHA50) added 2.60%, Hong Kong’s Hang Seng (HK50) was up by 2.52%, and Australia’s ASX 200 (AU200) was positive by 0.70%.

In Asia, the best-performing major stock market in 2023 was Japan’s Nikkei (JP225), with a gain of 28%, its highest annualized gain in a decade. Taiwan’s stock market is in second place with a year-to-date gain of 26.6%. India’s Nifty index ranks third with a 20% gain in 2023. Thailand’s SET index, on the other hand, has been the worst-performing stock market in Asia this year, with a 15% drop. Hong Kong’s Hang Seng Index (HK50) fell by 14% this year, making it the second-weakest performer. China’s blue-chip stocks are down by 11 % for the year.

Bank of Japan (BoJ) Governor Kazuo Ueda said yesterday that the probability that the Japanese economy will emerge from low inflation and reach its price stability target is gradually improving, although the likelihood is still not high enough. He added that if prices and wages continue to rise, the chances of sustainably achieving the 2% inflation target will increase enough that the Bank of Japan will probably consider changing its monetary policy as early as spring 2024.

China has promised to tighten monetary policy and boost consumer prices, which continued their decline last month. The central bank also promised to ensure reasonable credit growth, increase structural support for technology, infrastructure, and other sectors, and boost public investment to encourage private investment. Such a PBoC statement gave a boost to Chinese stocks yesterday.

S&P 500 (US500) 4,783.35 +1.77 (+0.04%)

Dow Jones (US30) 37,710.10 +53.58 (+0.14%)

DAX (DE40) 16,701.55 −40.52 (−0.24%)

FTSE 100 (UK100) 7,722.74 −2.21 (−0.03%)

USD Index 100.95 +0.25 (+0.24%)

• – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
• – US Chicago PMI (m/m) at 16:45 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) added 0.30%, while the S&P 500 Index (US500) was up by 0.14%. The NASDAQ Technology Index (US100) closed positive by 0.16% on Wednesday. A decline in global bond yields is lending support to stocks on optimism that global central banks will start cutting interest rates next year.

According to data compiled by Bloomberg, trading volume in US exchange-traded funds on Tuesday was 35% below the 30-day average. That suggests investor activity is waning ahead of the New Year.

Apple (AAPL) fell by 0.78%, added to Tuesday’s 0.28% loss, and topped the Dow Jones (US30) losers list after the US Trade Representative decided not to overturn the International Trade Commission’s ruling that Apple infringed two patents owned by Masimo and Cercacor Laboratories. AstraZeneca (AZN) rose more than 1% yesterday after its $1.2 billion acquisition of Gracell Biotechnologies, which allows it to expand its line of cancer drugs.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 0.21%, France’s CAC 40 (FR40) gained 0.04%, Spain’s IBEX 35 (ES35) added 0.10% and the UK’s FTSE 100 (UK100) closed positive by 0.36%. Speculation that the Fed will cut interest rates before the ECB puts pressure on the dollar and favors the euro. Markets estimate the chances of a 25 bps rate cut by the US Fed at 14% at the next FOMC meeting on January 30-31 and 98% at the March 19-20 meeting. Meanwhile, swaps rate the odds of a 25 bps ECB rate cut at 4% at the next meeting on January 25 and 64% at the March 7 meeting.

German 10-year bond yields fell to a one-year low. German bonds have been rising since late October as weak Eurozone economic data and slowing inflation suggest the European Central Bank won’t keep rates high for long.

Crude oil prices were under technical selling pressure on Wednesday as funds closed their crude oil positions ahead of the year-end.

Asian markets rallied yesterday. Japan’s Nikkei 225 (JP225) gained 1.13% over yesterday, China’s FTSE China A50 (CHA50) added 0.14%, Hong Kong’s Hang Seng (HK50) increased by 1.74%, and Australia’s ASX 200 (AU200) was positive by 0.79%.

Some BOJ officials called for a more in-depth discussion on the future exit from ultra-loose monetary policy as the economy moves towards the Bank’s price target. While the board agreed to maintain the massive stimulus for the time being, the views of the nine representatives were split between those who are cautious about raising interest rates and those who believe it is necessary to start preparing for a future exit.

Factory output in Japan fell in November, dragged down by a drop in auto production and clouding the outlook for the export-dependent economy. Automobile production, the mainstay of industrial output, fell by 2.5% in November. Output of electrical, information and communication electronics equipment also fell by 3.5% due to weak semiconductor demand.

S&P 500 (US500) 4,781.62 +6.87 (+0.14%)

Dow Jones (US30) 37,657.04 +111.71 (+0.30%)

DAX (DE40) 16,742.07 +35.89 (+0.21%)

FTSE 100 (UK100) 7,724.95 +27.44 (+0.36%)

USD Index 100.95 −0.52 (−0.51%)

• – Japan Industrial Production (m/m) at 01:50 (GMT+2);
• – Japan Retail Sales (m/m) at 01:50 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US Pending Home Sales (m/m) at 17:00 (GMT+2);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
• – US Crude Oil Inventories (w/w) at 18:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.