Weekly News 2023/12/25-2023/12/29

 U.S. stocks closed slightly lower on Friday. The Dow Jones Industrial Average closed 20.56 points, or 0.05%, at 37689.54 points; the Nasdaq fell 83.78 points, or 0.56%, to 15011.35 points; the S&P 500 index fell 13.52 points, or 0.28 points. %, reported 4769.83 points. This week, December, the fourth quarter and 2023, the three major stock indexes all recorded gains during these cycles. The S&P 500 is just one step away from its all-time high. The index's all-time high closing point was 4796.56 points set in January 2022, and the intraday high was 4818.62 points.

Mainly due to the strong rebound at the end of 2023, all three major U.S. stock indexes recorded gains for the ninth consecutive week. This week, the Dow rose 0.81% and the Nasdaq rose 0.12%, both setting their longest weekly winning streak since 2019. The S&P 500 rose 0.32%, recording its longest weekly winning streak since 2004.

In December, the Dow rose 4.84%, the Nasdaq rose 5.52%, and the S&P 500 rose 4.42%. In the fourth quarter, all three major stock indexes rose by more than 10%. The Dow rose 12.48%, the Nasdaq rose 13.56%, and the S&P 500 rose 11.24%. However, all three major stock indexes achieved their ninth consecutive week of gains, and recorded large gains in December, the fourth quarter and 2023.

For 2023, the Dow is up 13.7% and the S&P 500 is up 24.2%. The Nasdaq Composite Index rose 43.4%, recording its largest annual gain since 2003.

Quincy Krosby, chief global strategist at LPL Financial, said: “The market is showing weakness and will undoubtedly need to consolidate. But as long as market participation remains broad, bullish sentiment should drive stock indexes to strengthen amid the geopolitical and domestic situation.”

 Google (NASDAQ: GOOGL) has initially reached an out-of-court settlement agreement with consumers who accused it of violating privacy, involving at least US$5 billion in compensation. It is reported that Apple (NASDAQ: AAPL) is formulating a series of plans such as re-developing software to resolve Apple Watch patent disputes.

Boeing (NYSE: BA) found that the 737 MAX rudder connecting rod bolts are defective and are at risk of loosening and falling off. Boeing recommends that all airlines inspect them. The U.S. Federal Aviation Administration (FAA) said it is paying close attention to targeted inspections. The president of Boeing China said that all 737 MAX of China Civil Aviation have resumed operations.

NVIDIA (NASDAQ: NVDA) has released the RTX 4090 D graphics card for markets in China and other regions. It equipped with 24GB GDDR6X video memory and has a higher base frequency than the RTX 4090.

UnitedHealth Group (NYSE: UNH) disclosed on Friday that it will record approximately $7 billion in expenses in its financial report after reaching a deal to sell its Brazilian business to private investors. The health insurance company said the charge was the result of accumulated losses on foreign currency translations. UnitedHealth Group said the charge, which is primarily non-cash, will be booked upon closing of the sale of its Brazilian business, which it expects to close in the first half of 2024. The group said its 2024 net profit outlook will be affected by the charge, but its adjusted earnings per share forecast remained unchanged at $27.50 to $28. Analysts surveyed by FactSet currently expect the company's net income in fiscal 2024 to be US$24.65 billion on average, and adjusted earnings per share are expected to be US$27.90.

 Bitcoin fell below $42,000 on Friday, falling below its yearly high. Shares of U.S.-listed cryptocurrency-related companies sold off sharply on Friday as investors took profits on the final trading day of the year after an explosive rally in 2023. Cryptocurrency exchange Coinbase (COIN) fell 8% in the early hours of Friday, while shares of Bitcoin hoarder MicroStrategy, which has nearly $6 billion in Bitcoin in its treasury, fell nearly 7%. Nasdaq-listed Bitcoin miners Marathon Digital Holdings ( MARA ) and Riot Platform ( RIOT ) suffered deeper losses, falling more than 10%. Smaller public miners CleanSpark (CLSK) and Hut 8 (HUT) are also down nearly 20%.

The sell-off could be as investors lock in profits for 2023, setting up an explosive year for the battered asset class as Bitcoin price gains have been off yearly highs ahead of the approval of a U.S. spot ETF. Just below $42,000, its down from a high of nearly $45,000 set in early December but up 155% this year.

BlackRock, Fidelity and Invesco hope everything will go smoothly for them if the SEC approves it early in the new year. The bureaucratic race to launch a Bitcoin ETF came to a head on Friday, with some of Wall Street's biggest firms finalizing paperwork for their products ahead of widely expected, and possibly imminent, U.S. Securities and Exchange Commission approval.

BlackRock, Fidelity and Invesco, as well as cryptocurrency-focused firms Valkyrie and Bitwise, disclosed key details, including partnerships with key trading firms and what if the U.S. Securities and Exchange Commission approval, the fees their future ETFs will charge clients. The fun could start within a few days. ETF watchers expect the SEC to drop years of obstruction of a spot Bitcoin ETF in early 2024.

2023 is considered a notably successful year for gold, which achieved returns of just over 14%. The surge in gold demand can be attributed to geopolitical tensions in the Middle East and expectations that the Federal Reserve will slow down its tightening monetary policy in the coming year. The shift marks the start of a rate-cutting cycle that is expected to weaken the dollar and cause U.S. Treasury yields to fall.

Technically, the current situation points to an attempt to break out of the long-term consolidation that has been in place since the first half of 2020. Against the current backdrop, the most likely scenario is a continued upward trajectory with an initial target of around $2,100/oz.

In the first quarter of 2022, the Federal Reserve launched the strongest interest rate hike cycle in decades, raising the interest rate range from zero to 5.25%-5.50% by July.

Strong demand recently pushed prices past record highs of $2,150 an ounce, but these were quickly negated. Buyers are not lacking in motivation and all signs point to them being able to permanently overcome the key resistance area that has been tested multiple times over the past few years, which is located near the $2,100 level.

 Affected by geopolitical tensions, oil production cuts and global measures to control inflation, crude oil prices have experienced large fluctuations. After rising for two consecutive years, the settlement price of international crude oil futures fell slightly this week, with the cumulative decline for the whole year exceeding 10%. Specifically, the February contract price of WTI crude oil futures fell by 0.17%, and the cumulative decline for the whole year of 2023 was about 10.7%; the March contract price of Brent crude oil futures fell by 0.22%, and the cumulative decline for the whole year of 2023 was about 10.3%.

In terms of market news, some shipping companies said they would resume shipping through the Red Sea, easing market concerns about supply, causing crude oil prices to fall sharply on Thursday. This comes after Yemen's Houthi rebels began attacking ships, causing major companies to suspend the use of the Red Sea route. However, some crude oil and refined products tankers are choosing longer routes around Africa to avoid potential conflicts in the region. Geopolitical tensions in the Middle East continue to support oil prices. Israel stepped up attacks in southern Gaza on Friday.

In addition, data released by the U.S. Energy Information Administration (EIA) showed strong oil demand in October, which also provided some support for oil prices. The report stated that total U.S. oil demand increased by 3.4% in October compared with the same period last year.

The agency's survey of 34 economists and analysts forecasts that Brent crude oil prices will average $82.56 per barrel in 2024, down from the consensus of $84.43 in November. They expect weak global economic growth to limit demand, while geopolitical tensions could provide support.

 The U.S. dollar has endured a major roller coaster ride in 2023, as hopes of a U.S. Federal Reserve pivot have been repeatedly undermined by unexpectedly strong economic data, often coming from strong performance in the U.S. labor market. But traders seem more certain this time around that a pivotal point is coming, as Fed Chairman Jerome Powell himself gave subtle hints about it. As a result, despite the greenback's strong rebound over the summer and autumn, it still looks set to end the year down nearly 3% against a basket of currencies. The rally was driven by a surge in U.S. Treasury yields, which have since been hurt by rising expectations for a sharp rate cut in the coming year.

The possibility of cumulative interest rate cuts in 2024 is quickly approaching 160 basis points. This seems excessive given that the U.S. economy is not in recession and Fed officials are only predicting three interest rate cuts of around 25 basis points. The minutes of the December meeting that generated these forecasts will be released on next Wednesday and Federal Open Market Committee (FOMC) members may try to use the publication to reinforce their view that policy will only be moderately easing in the coming years. The labor market is concerned, things have been good so far. Job growth has slowed, but companies have not laid off large numbers of workers, allowing wages to rise modestly.

Investors' belief that the Fed will begin cutting interest rates soon, small moves in the headlines are unlikely to trigger a knee-jerk reaction in the dollar. A disappointing report is unlikely as weekly jobless claims are quite low this month. So, if anything is shocking, it's from an unexpected report.

OnePro Special Analyst

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