US Stock Futures Analysis: Steady End to Strong Year

Solid ECN – US stock futures remained stable on Thursday, as investors reflected on a year marked by robust gains in equities. The previous trading day saw the Dow increase by 0.3%, while the Nasdaq Composite rose slightly by 0.16%. The S&P 500 also saw a modest gain of 0.14%, approaching record levels. In this upward trend, eight out of the 11 S&P sectors closed higher, with real estate, healthcare, and consumer staples leading the charge.

The market's upward momentum is largely driven by the anticipation that the Federal Reserve will reduce interest rates next year. Bit Digital, an American bitcoin mining company, experienced an 18.6% surge in its shares. This followed its announcement to double its mining operations by 2024. Coherus BioSciences also enjoyed a significant 23.4% jump in its stock value after receiving US FDA approval for its new drug delivery device to fight infections.

Looking forward, both the Dow and S&P 500 are set to conclude the year with substantial gains, over 13% and 24% respectively. Meanwhile, the Nasdaq Composite has impressively rallied by 44.3% this year. This steady performance in US stock futures analysis reflects a year of consistent growth in the stock market.

Swiss Franc Hits Record High Against USD & Euro

The Swiss franc strengthened past 0.85 against the USD in late December, marking its highest level since August 2011. It is poised to register an 8.5% increase against the dollar this year, influenced by differing interest rate outlooks from the Swiss National Bank (SNB) and the Federal Reserve. The Fed's latest meeting revealed dovish projections, further amplified by new data indicating a slowdown in US inflation, which put pressure on the greenback.

In Switzerland, despite a slowdown in inflation, the SNB has noted that the potential for price growth to increase justifies maintaining higher interest rates for now. Inflation in Switzerland was last reported at 1.4% in November. However, the central bank anticipates a rise towards its 2% target in the second and third quarters of 2024. This forecast leads investors to expect that any reductions in interest rates by the SNB will likely occur well after the Fed's similar actions.

The sustained prospect of higher interest rates from the SNB has also propelled the franc to a record high against the Euro, the currency used in neighboring countries.

Russia Manufacturing Growth at Near 7-Year High

Solid ECN – The S&P Global Russia Manufacturing PMI rose to 54.6 in December 2023, up from 53.8 in November. This increase marks the sector's quickest expansion since January 2017, driven by continued improvements in output and new order growth. The rate of job creation accelerated, reaching its highest point in three months. Additionally, backlogs of work decreased for the second consecutive month. Purchasing activity grew at a substantial rate, the second-strongest since August 2006.

In terms of pricing, input cost inflation slowed to a six-month low. This was due to increased supplier prices and unfavorable exchange rate movements. However, output cost inflation remained relatively stable and was among the weakest in the past six months. Finally, business sentiment weakened, falling to a three-month low.

EURUSD Plunges: AO Divergence & Impact

The EURUSD currency pair experienced a sharp decline from 1.11394 in today's trading session, as previously hinted by the awesome oscillator's divergence.

Currently, the pair is testing the 23.6% Fibonacci level at 1.10403. Intriguingly, the RSI indicator is hovering near the median line and could dip below if selling pressure persists. The December 22 high at 1.1041 and the lower line of the bullish flag are jointly reinforcing the bullish trend. As long as the price stays above this level, the uptrend is likely to continue.

Conversely, a break below the bullish flag could signal further declines, with the next target being the 50% Fibonacci retracement level.

Istanbul's Manufacturing PMI Sees Slight Rise in December 2023

Solid ECN – In December 2023, the Istanbul Chamber of Industry Turkey Manufacturing PMI slightly increased to 47.4 from 47.2 the previous month. This change indicates a minor improvement in the manufacturing sector's health. However, it still represents the sixth consecutive month of contraction. Tough market conditions, both domestically and internationally, caused a slowdown in new orders and decreased production.

In terms of prices, December saw another rise in input costs. This increase was driven by a weaker currency, higher wages, and increased raw material prices. Yet, the inflation rate slowed down for the fifth month in a row. On the other hand, output prices saw their sharpest increase since August.

Purchasing activities were reduced significantly, the most in four months. Consequently, input stock levels also dropped. Regarding employment, it remained stable in December, breaking a two-month trend of decline.

2024 Starts with a Dip: U.S. Stock Futures Decline After Strong 2023

As 2024 begins, U.S. stock futures are experiencing a slight decline, marking a pause following a robust 2023 that witnessed substantial double-digit growth across the three main indices. Currently, investors are diligently evaluating the economic landscape and monetary policy expectations, especially in anticipation of the forthcoming FOMC minutes and the crucial jobs report due later this week.

The S&P 500 futures have dropped by 0.5%, while the Dow Jones is facing a reduction of approximately 110 points, and the Nasdaq 100 is also on a downward trajectory, decreasing by 0.7%. In the realm of corporate news, Tesla has seen its stock dip by about 1% in premarket trading. Market participants are keenly waiting for the company's announcement of its annual production and delivery figures, set to be released later today.

NZX 50 Dips Amid Global Market Jitters

Solid ECN – On Wednesday, the NZX 50 fell by 40.36 points, a 0.34% drop, ending at 11,730.14. This followed a slight downturn in US futures after a tough start to the year on Wall Street, especially in tech stocks. Ahead of key US job data and the nonfarm payrolls report, traders seemed less hopeful about interest rate cuts from the Federal Reserve.

Concerns grew as China's uncertain economic future cast a shadow, affecting its main trading partners like New Zealand. Recent data showed a decline in China's manufacturing for December, though some private surveys suggested a slight positive trend in the sector. The NZX 50 was impacted by sectors like manufacturing, transport, consumer services, and non-durables. Notably, Restaurant Brands NZ dropped 4.5%, Scales Corp. 2.9%, Auckland Intl. 2.7%, A2 Milk Co. 2.4%, and Meridian Energy Ltd. 1.8%.

Kiwi Dollar Drops, RBNZ Rate Cuts Loom on Horizon

Recently, the New Zealand dollar has been struggling, staying below $0.628. This is the lowest it's been in about two weeks. The reason behind this is the US dollar's strong recovery, which has led investors to rethink their previous expectations of significant interest rate cuts by the Federal Reserve within the year.

Additionally, there's been a shift towards a more cautious approach in the market, resulting in a drop in both stocks and commodities. Contrarily, US Treasury yields have been on the rise. Within New Zealand, the market is anticipating four rate cuts from the Reserve Bank of New Zealand (RBNZ) this year, with the first one possibly happening as early as May. The RBNZ’s head recently acknowledged the unexpected downturn in recent growth figures, increasing speculation about an earlier cash rate cut. Back in November, the RBNZ held the cash rate at 5.5%, narrowly avoiding a rate hike.

Swiss Franc's Shift: Balancing SNB and Fed Rate Outlooks

After reaching a 12-year peak of 0.841 on the last trading day of 2023, the Swiss franc has recently weakened to 0.85 against the USD. This shift occurred amid a recovery in the DXY index. Last year, the franc saw an 8.5% appreciation against the dollar, largely due to differing interest rate policies between the Swiss National Bank (SNB) and the Federal Reserve.

Recent dovish statements from Fed officials, coupled with new data indicating a slowdown in US inflation, have put pressure on the dollar. In Switzerland, despite a slowdown in inflation, the SNB has maintained a cautious stance, suggesting that higher interest rates are still necessary. Inflation in Switzerland was 1.4% in November. The central bank anticipates it will approach their 2% target by mid-2024. This forecast leads investors to believe that the SNB might delay rate cuts, especially compared to the Fed's timeline. The persistent high-interest rate expectations for the SNB also drove the franc to unprecedented levels against the Euro, the currency of its neighboring countries.

WTI Futures Drop Below $69.5, Market Weighs Supply and Risk

On Wednesday, WTI crude futures experienced a notable decline, dropping over 1.5% to reach a three-week low, falling below $69.5 per barrel. This downturn came on the heels of a 1.8% loss in the previous session, influenced by a broad selloff in risk assets. This selloff occurred despite rising tensions in the Middle East, which might typically bolster oil prices. As the new year began, the market's mood was cautious, with stocks and other risky assets facing downward pressure. This sentiment was further influenced by a rebound in the dollar and Treasury yields, as investors recalibrated their expectations for significant rate cuts from major central banks.

Contributing to the oil price drop is the increase in global supplies, especially from non-OPEC countries, combined with a shaky demand forecast. Additionally, traders are keeping a watchful eye on geopolitical events, particularly Iran's recent deployment of a warship in the Red Sea, seen as a challenge to US forces in this crucial trade corridor. Over the weekend, there was a confrontation when US Navy helicopters intercepted three Houthi boats that were attempting to hijack a container ship in the Red Sea, leading to casualties.

NZX 50’s Comeback: A Detailed Analysis

Solid ECN – On Thursday, the NZX 50 index made a comeback. It rose by 28.98 points or 0.25%, ending at 11,759.11. This was after a slow start with minor losses. The turnaround happened when a private report showed that service activities in China, a major trade partner, reached a five-month high in December.

Market players were optimistic. They hoped that Chinese authorities would shift from yuan stabilization to monetary easing. This came after the People’s Bank of China (PBoC) significantly weakened the currency fixing, the most in over six months. US futures also saw a slight increase, boosting market sentiment. Investors were still processing the latest Federal Reserve minutes, which hinted at potential rate cuts in 2024.

In company news, PaySauce, a fintech firm, reported a 23% annual increase in its recurring revenue for the fiscal quarter ending on December 31st. The day’s top performers included industrial services, consumer durables, and utilities sectors. In terms of individual stocks, Scales Corp. led the pack with a 3.0% jump. It was followed by Meridian Energy Ltd. (2.8%), Comvita NPV (2.6%), and Hallenstein Glassons Holdings (1.3%).

NZX 50's Slight Dip Amid Global Uncertainty

Solid ECN – Heading into 2024, New Zealand's NZX 50 saw a slight decline, ending at 11,748.49 on the last day of the week. This minor fall of 0.1% encapsulated the market's tepid response to international economic signals. Notably, Wall Street's sluggish beginning to the new year played a role in this downturn.

Furthermore, speculation is rife regarding potential shifts in US Federal Reserve interest rates, adding to the air of uncertainty. This, coupled with the anticipation of December's job report, has prompted a cautious approach from investors.

In New Zealand, there's a mixed sentiment among economists about the Reserve Bank of New Zealand's (RBNZ) future moves. While some predict a possible change in the cash rate by August, confidence in this forecast remains moderate. Shifting focus to China, New Zealand's key trading ally, Goldman Sachs anticipates that the People's Bank of China might lower the reserve requirement ratio twice in 2024, aiming to bolster the nation's economic rebound.

Specific sectors like consumer durables, energy minerals, and technology services contributed to the NZX 50's decline. Leading the downward trend were companies such as Infratil Ltd., Gentrack Group Ltd., Briscoe Group, and Property for Industry, all experiencing notable drops in their stock values.