Market Rally Set to Continue as Investors Look to 2025
As the year comes to a close, US equity futures are on the rise, signaling a potential end to three days of losses and a continuation of the powerful Wall Street rally that has defined 2024. The S&P 500 and Nasdaq 100 contracts are up around 0.4%, indicating a rebound from Monday’s declines.
Global Markets Mixed
European trading has been muted, with several markets closed for New Year’s Eve and shortened sessions in London and Paris. In Asia, trading has been thin due to public holidays in several regional markets, including South Korea. Japanese markets will remain closed until January 6. Stocks have fallen in Australia and mainland China, while those in Hong Kong have remained flat.
Investors Cautious Ahead of 2025
As investors look to the new year, they are faced with a range of uncertainties, from President-elect Donald Trump’s protectionist policies to the outlook for central bank policy and the health of the European and Chinese economies. The Bloomberg Dollar Spot Index is on track for its best year since 2015, driven by Trump’s reelection and the Federal Reserve’s less dovish policy pivot.
Economic Data and Geopolitical Tensions
Chinese equities have shrugged off data showing an improvement in both services and manufacturing activity, with investors instead focusing on the country’s 2024 economic growth target of around 5%. Meanwhile, the US Treasury Department has announced that it was hacked by a Chinese state-sponsored actor through a third-party software service provider, highlighting ongoing tensions between Beijing and Washington.
Commodities on the Rise
Gold is set for one of its biggest annual gains this century, advancing 27% in 2024. Oil has climbed after factory activity expanded for a third month in China, evidence of economic recovery in the world’s top crude importer. European natural gas prices have risen in anticipation of a halt in Russian flows via Ukraine on New Year’s Day.
Key Events This Week
- New Year’s Day holiday, Wednesday
- US construction spending, jobless claims, manufacturing PMI, Thursday
- US ISM manufacturing, light vehicle sales, Friday
Market Moves
- S&P 500 futures rose 0.4% as of 7:23 a.m. New York time
- Nasdaq 100 futures rose 0.4%
- Futures on the Dow Jones Industrial Average rose 0.3%
- The Stoxx Europe 600 rose 0.4%
- The MSCI World Index was little changed
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0410
- The British pound was unchanged at $1.2550
- The Japanese yen was little changed at 156.69 per dollar
- Bitcoin rose 2.8% to $94,467.11
- Ether rose 2.6% to $3,400.95
- The yield on 10-year Treasuries was little changed at 4.53%
- Germany’s 10-year yield declined three basis points to 2.37%
- Britain’s 10-year yield declined four basis points to 4.57%
- West Texas Intermediate crude rose 0.9% to $71.60 a barrel
- Spot gold rose 0.2% to $2,611.21 an ounce
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