By Vivek Kumar
Moving Markets Today: Japan’s Nikkei 225 Soars to 33-Year High, U.S. Dollar Steady, Bitcoin’s Rollercoaster Ride, Ongoing Surge in Oil Prices, All Eyes on U.S. Inflation Figures
The S&P 500 and Dow experienced declines and ended the day lower, influenced by a slight increase in Treasury yields. Japanese equities are strong, hitting a 34-year high, while Asian markets show early strength. Bitcoin experiences volatility after a false SEC approval claim for ETFs. The World Bank forecasts a 2024 global growth slowdown, and the ECB’s Mario Centeno suggests a sooner-than-expected rate cut. Traders keenly await Thursday’s U.S. consumer price index report for insights into the potential for a March rate cut. Here are five key takeaways for your day.
Bitcoin Experiences Volatile Swings Amidst False SEC Approval Claim for ETFs
Cryptocurrency prices swung dramatically after a false post on the US Securities and Exchange Commission’s official X account claimed approval for the first-ever US spot bitcoin exchange-traded funds (ETFs). The SEC clarified that the post was unauthorized, confirming no approval for spot bitcoin ETFs. Bitcoin initially surged to a 21-month peak of $47,897 but quickly dropped below $45,000 as the SEC removed the false information.
World Bank Warns of Third Consecutive Year of Global Growth Slowdown
The World Bank warned that global growth is projected to slow for the third consecutive year in 2024, potentially exacerbating poverty and increasing debt levels in developing nations. According to the latest Global Economic Prospects report, global GDP is expected to grow by 2.4% this year, down from 2.6% in 2023, 3.0% in 2022, and the significant rebound of 6.2% in 2021. The report envisions a slightly higher growth of 2.7% in 2025, a downgrade from the June forecast of 3.0%, primarily due to anticipated deceleration in advanced economies.
Boeing CEO Dave Calhoun acknowledged a mistake in the mid-air panel blowout incident on an Alaska Airlines jet on Friday. He assured staff that Boeing would collaborate with regulators to prevent a recurrence.
U.S. and UK forces downed 21 drones and missiles fired by Yemen’s Houthi rebels into the Southern Red Sea and international shipping lanes on Tuesday, according to the U.S. military’s Central Command.
Australia’s Inflation Hits Near Two-Year Low, South Korea’s Jobless Rate at Near Two-Year High
Australia’s inflation hit a near two-year low in November, with the Consumer Price Index (CPI) rising at an annual pace of 4.3%, down from 4.9% in October. Core inflation, measured by the trimmed mean, dropped sharply from 5.3% to 4.6% annually. The softer-than-expected results suggest no immediate need for further interest rate hikes, according to data from the Australian Bureau of Statistics.
South Korea’s unemployment rate hit a near two-year high of 3.3% in December, according to official data released on Wednesday. This marked an increase from November’s 2.8% and the highest level since January 2022, as reported by Statistics Korea.
ECB policymaker Mario Centeno hinted at the possibility of the European Central Bank (ECB) cutting key interest rates earlier than anticipated, citing a lack of additional inflationary pressure. Centeno suggested that waiting until May for a decision might be unnecessary. Fellow ECB policymaker Francois Villeroy de Galhau also stated on the same day that the ECB plans to lower interest rates this year once there is clear evidence of the inflation outlook aligning with its 2% target.
Key Focus: Taiwan Elections, Corporate Earnings, and U.S. Inflation Take Centre Stage
This week brings pivotal moments for investors globally. Taiwan’s presidential and parliamentary elections and the start of the U.S. earnings season with BlackRock, Citigroup, and JPMorgan Chase in focus will headline the financial landscape. In the UK, trading updates from major brands like Marks and Spencer, J Sainsbury, Tesco, B&M, and Greggs will offer insights into post-holiday consumer confidence. Key economic data, including the European Central Bank Economic Bulletin, U.S. CPI inflation, unemployment claims, China’s trade balance, UK’s GDP estimate, and U.S. PPI inflation rate, will shape market dynamics. It’s a week filled with geopolitical events, corporate performance, and economic indicators influencing investor sentiment.
Japan’s Nikkei 225 Hits 33-Year High, Outpacing Asian Markets; Oil Prices Extend Gains
The S&P 500 slipped 0.2% post strong gains, remaining near its all-time high. Japanese stocks, particularly the Nikkei 225 at a 33-year high, outperformed, with the Topix up 1% and Nikkei 225 up 1.5%. Other Asian indices opened lower, including a 0.7% drop in Hong Kong’s Hang Seng and a 0.6% fall in China’s CSI 300. Overnight, U.S. 10-year Treasury yields rose 1.5 bps, holding at 4.01% in Tokyo. The U.S. dollar maintained slight gains, Brent crude futures rose 0.1% to $77.68, and Bitcoin dipped to $45,683 from a spike to $47,897 on false ETF approval reports. Spot gold edged up 0.1% to $2,031.30, while U.S. gold futures rose 0.2% to $2,036.90.
