General Market Analysis 29/12/2023 – IC Markets

US Markets to Hit the New Year in Positive Mood

The major US stock indices enter the last trading day of the front foot after a quiet session where they consolidated near record highs again. The Dow Jones added just 0.14% on the day and both the S&P 500 and the Nasdaq finished up close to flat on the day. The dollar gained back a bit of lost ground from the last few days with the Euro dropping 0.4% and sterling losing 0.5% against the greenback. US treasury yields also experienced a rate positive day with the benchmark 10-year adding 5 basis points to close at 3.84%. Gold also lost 0.5% against the dollar, trading now around $2,066/oz.

Investors Hoping for more of the Same in 2024

Many investors and commentators have been surprised by the strength of US markets over the course of 2023 and are hoping for more of the same into the new year. The Nasdaq surged to the tune of $7 trillion in the last 12 months, driven largely by AI heavy stocks and the S&P and Dow are closing close to record highs. Investors are hoping that a final ‘Sanat Rally’ into the first few days of the new year will see technical breaks that lead to indices trading in new higher ranges for Q1 2024, however there are the usual doubters out there. Recent moves in the bond markets have acted effectively as rate cuts in the US and this can lead to inflationary pressures. Added to this the concern that traders have taken equities too far, too fast and into overbought territory add to the fear that some serious corrections could spoil the new year party. Whatever the scenario that plays out, it looks certain that there will be interesting trading days ahead in 2024. Happy New Year!

Traders Hoping for a Restful Day into the New Year

It is always difficult to trade the last week of the year as Christmas holidays in major centres and anticipation of the New Year leads to reduced trading desks and investor flow and therefore poor liquidity. This week has been no different, but most have managed to weather the storm and are looking forward to a smooth trading day ahead before the new year and for many, a new budget. There is little on the event calendar again today although the Spanish CPI data in the European session and the Chicago PMI number in the US Day will still need to be negotiated and traders will also be aware that Chinese PMI numbers are set to come out over the weekend. However, most are expecting smooth trading conditions into the weekend and therefore into the New Year.

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