That was the trading day, 12/30/24: Technology sell-off leads to market decline, energy commodities recover

• US markets are experiencing broad weakness today, particularly in the technology sector. The Dow Jones has fallen 1.1% (42,525), partially recouping previous losses of up to 700 points. Leading the decline are the big technology stocks, with Broadcom (-3.31%), Microsoft (-1.68%) and Salesforce (-1.74%) recorded significant losses.
• NYSE and Nasdaq will close on January 9th to honor Jimmy Carter. The former US President died yesterday at the age of 100.
• In economic data, the U.S. Chicago Purchasing Managers’ Index was well below expectations at 36.9 (forecast: 42.7), while pending home sales rose unexpectedly strongly, rising 2.2% month-on-month, versus a forecast of 0. 9%.
• European markets are mostly in negative territory, with major indices such as CAC 40 (-0.35%), FTSE 100 (+0.04%) and DAX (-0.40%) had a mixed performance. Spanish inflation data came in higher than expected at 2.8% year-on-year (forecast: 2.6%).
• The ECB’s Stournaras said that “larger cuts should not be ruled out” as medium-term inflation in the euro zone could fall below the 2 percent target.
• However, ECB Director Holzmann said at the weekend that interest rate cuts could be postponed in the event of increased inflationary pressure from energy prices and an even greater devaluation of the euro.
• Market breadth continues to deteriorate, with fewer than 60% of S&P 500 companies trading above their 200-day moving average – the weakest level since 2024. Magnificent Seven stocks are showing unusual weakness: Apple is at 1.68 % down, Meta down over 2% and NVIDIA down 0.31%.
• The shares of Boeing (BA.US) fell almost 2% following news of a tragic Boeing 737-800 crash in South Korea that killed 179 people.
• Energy commodities are showing strong performance today. Natural gas (NATGAS) rises 17.09% after NOAA predicted significantly cooler temperatures in the US in its updated forecasts. Crude oil prices are also gaining momentum: WTI rises 1.50% to $71.25 and Brent by 1.20% to $74.28.
• Precious metals are under pressure across the board platinum leads the decline (-1.44%), followed by Silver (-1.40%), palladium (-1.21%) and Gold (-0.42%).
• In the cryptocurrency space, most major tokens are showing positive momentum, with Bitcoin recovered from initial losses (+0.65%). Ethereum is up over 1.88% while Solana increased by 1%. MicroStrategy announced the acquisition of 2,138 Bitcoin tokens at an average price of $97,837.
• The foreign exchange markets are showing a mixed performance, with most major currency pairs showing relatively modest moves. The Mexican peso is significantly weaker (-1.16%), while European currencies are weakening slightly against the USD.

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