Thursday's Markets Update (December 19, 2024)

20 Dec 2024 by rate3

On Thursday, equities were in the red. The Fed's hawkish outlook on future rate cuts dampened market sentiment. New macro data showed a weakening of manufacturing conditions in several regions. The dollar continued to rise, while EU markets reacted with a sharp downturn. Central bankers in both England and Japan held their key rates, citing worsening geopolitical conditions. BTC and ETH continued to fall as corporate investors, faced with market jitters, tried to secure profits in risk-on assets before the start of 2025.

Details

Core PCE prices increased 2.2% in Q3 2024, slower than a 2.8% gain in the previous quarter. This metric averaged 3.23% since 1959, reaching a high of 11.9% in 1974 and a low of -0.8% in 2020. 1Y trend: "Down" (BEA)
The Philly Fed Business Conditions Index went down to 30.70 in December, from 56.60 in November. This index has averaged 33.83 since 1968, reaching a high of 91.00 in 1975 and a low of -39.70 in 1973. 1Y trend: "Up" (PFed)
The Philadelphia Fed Manufacturing Index plunged to -16.4 in December, indicating a significant weakening in regional manufacturing activity. New orders and shipments declined, while input costs remained elevated. Despite the downturn, firms remain somewhat optimistic about future growth. 1Y trend: "Down" (PFed)
Existing home sales rose 4.8% in November, reaching an eight-month high. Increased housing inventory and job growth contributed to the rise. The median home price increased by 4.7% YoY. 1Y trend: "Side" (NAR)
The Kansas Fed Composite Index declined to -4 points in December, down from -2 points in November. The index has averaged 5.06 points since 2001, with a high of 32.00 and a low of -30.00. 1Y trend: "Side" (KFed)
The economy grew at an annualized rate of 3.1% in Q3 2024, exceeding previous estimates. Strong consumer spending and investment contributed to the growth. 1Y trend: "Side" (BEA)
Initial jobless claims fell more than expected in the first week of December, easing concerns about a weakening labor market. This supports the Fed's view that further interest rate cuts may be limited. 1Y trend: "Up" (DOL)
Net Purchases of Treasury Bonds and Notes increased by $92.1B in October. Foreign Bond Investment has averaged $10.68B since 1978, reaching a high of $175.16B in August 2022 and a low of -$310.79B in March 2020. 1Y trend: "Up" (GOV)

Crypto

A recent poll by Emerson College shows that nearly one-third of young American voters under 40 use cryptocurrencies, with usage decreasing with age. About 20% of all registered voters have engaged with digital assets, but 81% haven't. Men are twice as likely to use crypto compared to women (26% vs. 13%). Furthermore, around one-third of Asian, Hispanic, and Black voters are involved in cryptocurrency, compared to 14% of white voters. The survey had a margin of error of ±3%. (source)

World Markets

EU stocks fell sharply, driven by the Fed's hawkish outlook on future rate cuts. Tech and industrial stocks were hit hard. The BoE held rates steady, while the Swedish Riksbank cut rates. 1Y trend: "Up"
The Bank of England held its key interest rate steady at 4.75% in December. While some policymakers favored a rate cut, the bank emphasized the need to maintain a restrictive monetary policy to combat geopolitical instability. 1Y trend: "Up" (BoE)
The Bank of Japan maintained its key interest rate at 0.25% in its final meeting of the year. While one board member voted for a rate hike, the BoJ emphasized the need to carefully assess economic risks, including Americans' policies and wage growth. The bank expects a moderate economic recovery in Japan, with inflation remaining elevated. 1Y trend: "Up" (BoJ)
Angola's economy grew by 5.5% YoY in Q3 2024, the strongest growth in nearly a decade. Key contributors to this growth included oil and gas extraction, trade, agriculture, and manufacturing. 1Y trend: "Up" (NEA)