Shares in Australia and South Korea rose slightly, and U.S. stock futures also rose after both the S&P 500 and Nasdaq 100 fell on Thursday. Stock trading in Japan will be closed due to the holiday.
The decline in U.S. stocks was accompanied by a rise in the dollar, a popular haven, which hit a two-year high on Thursday and opened Friday in mostly unchanged trading. The yen fell against the dollar for the first time in three days, but rose in early trading.
The move signals that the selloff that has dragged down U.S. stocks over the past week may be starting to reverse. After a tough end to 2024, investors are preparing to implement asset allocation strategies for the year ahead.
Australian and New Zealand government bond yields were little changed after the US bond market was flat on Thursday. The yield on the U.S. 10-year Treasury note fell 1 basis point during trading. Trading in US Treasuries in Asia will be suspended due to the Japanese holiday.
Chung In-yun, CEO of Fibonacci Asset Management Global, said on Bloomberg TV that President-elect Donald Trump’s “policies, especially on tariffs, are inherently inflationary.” “The fact that inflation is so sticky and slow to come down means that the current state of moderate interest rates could persist for a long time.” The decline in U.S. stocks was partly due to Tesla’s lackluster financial results. It became. Fourth-quarter deliveries were weaker than expected, and annual sales fell for the first time in more than a decade. The company’s stock price is currently down 18% since Christmas. Risk aversion also hurt Asian stocks on Thursday. Chinese stocks were the worst performer of the session as data showed a slowing economy and traders looked ahead to possible tariff hikes.
A global benchmark for emerging market stocks fell to its lowest level since September, nearly 10% from its early October high.
Despite a modest rise in U.S. Treasuries on Thursday, the benchmark 10-year Treasury yield remains nearly 20 basis points above where it was before Chairman Jerome Powell turned hawkish at the Federal Reserve’s Dec. 18 meeting. The transaction was completed. There are big moves across asset classes after the Powell board expressed less enthusiasm for rate cuts.
The Fed will likely find little in Thursday’s economic data to support a rate cut. U.S. new jobless claims fell to an eight-month low, reflecting a relatively modest level of layoffs in a labor market that has remained surprisingly resilient.
Morgan Stanley Wealth Management’s Lisa Charette warns that 2025 will be a “show-and-tell” year in terms of corporate profits, with the Magnificent Seven (which made most of last year’s profits) He warned that the dominance of leading technology stocks remains strong. It was shaky.
“The idea that we can work together as a group to lead the market may be challenged by 2025,” she says. “It’s too early to call it a bad omen” for landslides at the end of 2024, Charette told Bloomberg TV.
On a losing streak
U.S. stocks are trying hard to end a losing streak that has taken the luster away from the S&P 500’s two-year best performance dating back to the late 1990s. The index has risen more than 50% since the beginning of 2023, led by a rally in tech mega-cap stocks amid a frenzy for profit-boosting gains from artificial intelligence.
Investors will be watching Friday’s vote by the Speaker of the U.S. House of Representatives to see if Mike Johnson keeps his job. The Republican fight for re-election could have a negative impact on President-elect Donald Trump’s policies, said Sevens Report founder Tom Essay.
European energy stocks outperformed as natural gas prices soared as the region braced for sub-zero winter temperatures in the absence of supplies from Russia, which are routed through Ukraine. The transit agreement between the two warring countries expires on New Year’s Day, with no alternative arrangements in place.
Elsewhere in commodities, oil prices were firm after rising on Thursday on industry reports suggesting U.S. crude inventories continue to shrink. Inventories fell by 1.4 million barrels last week, the sixth consecutive year of decline, according to a report from the American Petroleum Institute.
Gold prices were steady at around $2,657 an ounce last year after posting their biggest annual increase since 2010. Bitcoin fell for the first time in four days.