Friday's Market Update (January 3, 2025)

03 Jan 2025 by rate3

On Friday, stocks rose, snapping a five-session decline as the ISM Manufacturing PMI showed signs of improvement. Tech stocks led the gains, with Nvidia and Tesla rising significantly. The Indian rupee dropped to an ATL again, while the Chinese yuan continued to depreciate as the CBC indicated its intention to loosen policies. BTC and ETH rose, with the latter leading the way with a 4% jump as corporate traders hopped on the ETH bandwagon after Trump's victory. Inflows into ETH ETFs reached $2.1B.

Details

The ISM Manufacturing PMI rose to 49.3 in December, showing the softest pace of contraction in 10 months. New orders increased, leading to higher production. Input costs rose, and firms are investing to mitigate potential tariff impacts. 1Y trend: "Side"

Crypto

Inflows into ETH spot ETFs reached a new high in December, totaling $2.1B. Fidelity's ETH Fund saw the highest inflows, followed by Grayscale and Bitwise. This surge in inflows suggests growing investor interest in Ethereum ETFs. (source)

World Markets

The FAO Food Price Index fell 0.5% in December 2024, driven by lower sugar, dairy, and vegetable oil prices. Meat prices rose slightly. The index averaged 122 points for 2024, 2.1% lower than in 2023. 1Y trend: "Up" FAO
Germany's unemployment rate remained at 6.1% in December, slightly below expectations. The number of unemployed increased slightly. The labor market has been impacted by the ongoing economic downturn. 1Y trend: "Up"

Currencies

The offshore yuan plunged past 7.35, its lowest level since 2007, as the PBoC signals a more accommodative monetary policy. This suggests the central bank may allow further depreciation to support economic growth amid concerns about slowing activity and deflationary risks. 1Y trend: "Up, Depreciating"
The Indian rupee weakened to a record low (86), pressured by capital outflows and expectations of an RBI rate cut. Slowing economic growth and increased Chinese economic optimism have driven investors away from Indian assets. 1Y trend: "Up, Depreciating"

On Week 2, will feature key data releases, including the FOMC Minutes on Wednesday, followed by the Unemployment Rate on Friday. Other notable releases include and ISM Services PMI, JOLTs Job Openings and inflation data from both the Euro Area (YoY Flash and Unemployment Rate) and Germany and France (YoY Preliminary). Additionally, China will release its YoY Inflation Rate, while Japan will report on Consumer Confidence for December.