U.S. Market Performance
U.S. benchmark equity indexes closed lower on the final trading day of 2024, though all three major indices posted solid double-digit percentage gains for the year.
- Nasdaq Composite fell by 0.9%
- S&P 500 dropped by 0.4%
- Dow Jones Industrial Average edged down by 0.1%
Despite the declines, investor sentiment remains positive as 2025 begins, with expectations of continued economic growth and strong corporate earnings. Technology shares were the weakest performers, while energy stocks benefited from rising oil prices.
The U.S. 10-year Treasury yield rose to 4.57%, indicating a higher-rate environment for the foreseeable future.
Outlook
Equity markets are poised for further potential gains if economic growth continues and earnings stay strong. Bonds performed well in 2024:
- U.S. investment-grade bonds showed positive returns.
- High-yield and international bonds outperformed.
Global Market Update
Asian Markets
Most Asian equities fell on Thursday, reflecting Wall Street’s subdued end to 2024. Chinese shares dropped sharply after weaker-than-expected manufacturing data. Concerns about a potential U.S.-China trade dispute and a less dovish U.S. Federal Reserve also weighed on markets.
U.S. Futures
U.S. equity index futures declined at the start of 2025 following a strong 2024. Investor concerns over slower interest rate cuts by the Federal Reserve and uncertainty surrounding President-elect Trump’s policies dampened sentiment. Trading volumes were low due to the holiday season but are expected to rise in the coming week.
European Markets
European markets ended the year higher, with the CAC 40 and FTSE 100 posting gains, although trading volumes were thin. European indices underperformed relative to U.S. markets, constrained by political uncertainty and economic slowdown during Q4 2024.
Currencies and Commodities
- U.S. dollar remained strong entering 2025, driven by expectations of higher interest rates and safe-haven demand amid global uncertainty. The euro traded at $1.0362, reflecting a 6% decline in 2024. Markets expect further rate cuts from the European Central Bank this year.
- Oil prices rose on the first trading day of 2025, fueled by optimism over Chinese economic recovery after President Xi Jinping’s pledge to boost growth. However, geopolitical risks and U.S.-China trade tensions kept investors cautious.
Economic Data
Chinese manufacturing activity expanded at a slower pace in December:
- Caixin PMI dropped to 50.5 from 51.5 (below the forecast of 51.6).
- Weak growth was attributed to falling export orders and lower business optimism.
Corporate News
Tesla
A Tesla Cybertruck exploded outside the Trump International Hotel in Las Vegas on Wednesday, killing the driver and injuring seven others. The FBI is investigating whether it was an act of terrorism. CEO Elon Musk confirmed the explosion was caused by fireworks or a bomb in the vehicle, not a fault of the Cybertruck itself.
Apple
Apple is offering up to 500 yuan discounts on its latest iPhone models in China to address market share declines amid growing competition from local brands like Huawei. UBS analysts lowered December sales estimates, citing weaker demand and iPhone’s declining global market share, especially in China.
Siemens
Siemens is reviewing its €45 billion majority stake in Siemens Healthineers, citing limited synergies between the two entities. A strategic update will be presented during a capital markets day in late 2025.
Tech Outlook
Wedbush analysts project a 25% rise in tech equities in 2025, driven by reduced regulatory pressure and ongoing AI advancements. Over $2 trillion in AI capital expenditure is expected in the next three years. Key growth drivers include companies like Nvidia, Microsoft, Palantir, and Salesforce.
Upcoming Data and Events
Key economic releases today:
- December manufacturing PMI for France and Germany.
- U.S. weekly jobless claims report, offering insights into the labor market.
For more information visit https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice.
