Moving Markets today: FTSE 100 in red to begin the year but oil rises
Moving Markets Today: Asia Stocks Mirror Wall Street Decline, Apple at Seven-Week Low, Oil Prices Rise; Focus Shifts to Fed Minutes, U.S. Jobs Report, and Eurozone Inflation
US stocks, led by the S&P 500 and Nasdaq Composite, closed lower on the first trading day of 2024, influenced by a drop in Apple shares and broader tech losses amid rising Treasury yields. In the Asia-Pacific region, equities declined as hopes for U.S. interest rate cuts dimmed. Oil prices slightly rose due to concerns about shipping disruptions in the Red Sea and increased Middle East tensions. Investors are keenly watching key events, including the release of Fed minutes and critical data this week, for insights into global central bank actions. Here are five key takeaways for your day.
U.S. National Debt Surpasses $34 Trillion Mark; Trump Files Lawsuit After Maine Primary Ouster
The U.S. federal government’s total public debt has surpassed $34 trillion for the first time, as per the latest report from the Treasury Department on Tuesday. This comes as Congress readies for upcoming battles over federal funding, with the Daily Treasury Statement for Friday showing an increase from $33.911 trillion on Thursday to $34.001 trillion.
Donald Trump sues to get back on Maine’s primary ballot after being disqualified for his role in the Capitol attack.
Shipping Giants Suspend Red Sea Routes; Gaza Conflict Expands to Beirut
Maersk and Hapag-Lloyd are avoiding the Red Sea route to the Suez Canal after Houthi militants attacked a Maersk vessel. Ongoing security concerns prompted sailings to be rerouted through the Cape of Good Hope, raising worries about increased delivery costs and global inflation. Following an attempted boarding on the Maersk Hangzhou, all Red Sea sailings were temporarily halted for 48 hours. U.S. military helicopters repelled the attack, resulting in 10 militants’ death.
Israel’s reported drone strike in Beirut targeted and killed Hamas deputy leader Saleh al-Arouri, escalating tensions beyond Gaza. Oil prices rose in early Asian trade due to concerns about shipping disruptions in the Red Sea and heightened Middle East tensions.
UK Business Leaders Grow More Pessimistic about Economic Outlook
British business leaders are more pessimistic about the economy, impacting investment decisions, according to a recent survey by the Institute of Directors. The confidence index fell from -21 in November to -28 in December, reversing a trend of gradual improvement since June.
What’s Coming Up
The market is closely watching data this week to understand global central banks’ potential rate cuts. The focus is on the upcoming Federal Reserve minutes from December, with optimism for aggressive policy easing. Futures suggest expectations for six rate cuts in 2024. Key events include the ISM survey on U.S. manufacturing and job openings data on Wednesday, followed by a private payrolls report and jobless claims on Thursday.
Preliminary Eurozone inflation figures and highly anticipated U.S. nonfarm payrolls report are due on Friday, with markets watching both closely.
Asia Shares Follow Wall Street Lower, U.S. Dollar Holds Firm
The S&P 500 closed down 0.57% at 4,742.83, Nasdaq fell 1.63% to 14,765.94, while Dow Jones rose 0.07% to 37,715.04. Apple dropped 3.6% post-Barclays downgrade on weak iPhone demand. Other major stocks like Nvidia, Meta Platforms, and Microsoft slid 1.4% to 2.7%. Moderna soared 15.5% after an Oppenheimer upgrade. In Asia-Pacific, markets opened lower, with Hong Kong’s Hang Seng down 1% due to a 2.5% decline in Alibaba shares. Tencent fell over 1%, South Korea’s Kospi retreated by nearly 2%, and Australia’s S&P/ASX 200 declined by 1%. China’s CSI 300 stayed flat, and Japan’s Topix edged up 0.2%.
Stocks felt pressure as Treasury yields rose at the start of the year. The 10-year U.S. Treasury briefly exceeded 4% before closing at 3.9406%, up 8 basis points. Cash Treasuries were inactive in Asia due to a Japanese holiday. The U.S. dollar, up 0.8% overnight, hovered around 102.15. Bitcoin rose 0.5% to $45,205, near a 21-month peak. Oil prices edged 0.1% higher for U.S. crude futures at $70.43 a barrel, following a 1% drop on Tuesday, while Brent remained steady at $75.86 a barrel. Spot gold inched 0.1% higher at $2,060.18 per ounce.