The Actions world took a breather on the last trading day of the year, but were on track to close with their biggest annual gain since 2019, while United States Treasury bonds They will end the year, broadly speaking, where they started, camouflaging some wild moves for the benchmark in 2023.
He S&P 500 ended on Thursday just 0.3% from its all-time closing high, reached on January 3, 2022. Futures for the index rose 0.1%, leaving traders waiting to see if the benchmark will reach a new maximum just when the year ends.
The Standard & Poor’s index has soared almost 25% this year thanks to the huge rebound in technological values large cap, while the STOXX 600 Europe, currently around a 23-month high, is headed for a 12% annual rise, and the MSCI index of world stocks to an increase of 20%, the highest in four years. They all rose strongly in November and December.
US Treasury yields and the lag in China
“We have eaten up much of the returns that were expected in 2024. The positive momentum in the markets is obviously associated with falling returns, so the question now is how long can this trend continue,” he said Samy Chaarchief economist of Lombard Odierto Reuters.
“It doesn’t necessarily have to stop, future yields are probably more moderate than they were in early November, but if we think that the long end of the US curve may settle around 3.5%-4%, which is “Where we are now, there is little danger of a major 180-degree turn, and if companies can continue to generate profits there could still be a few percentage points of upside,” he added.
The benchmark 10-year Treasury yield stood at 3.885%, up 3 basis points on the day and, surprisingly, only 5 basis points above its level at the beginning of the year. This annual performance masks some important swings, as it reached 5.021% in October, its highest level since 2007, before retracing and driving the stock higher.
Behind the fall in yields is the sustained decline in the inflation around the world, which has boosted expectations that central banks will cut interest rates early next year even as the U.S. economy has remained broadly strong.
The markets in China have been the furthest behind, despite the optimism at the beginning of the year, when Beijing ended its policy of zero Covid. As he Hang Seng index of Hong Kong as the first order value index of China lost more than 10% in the year, due to lower investor confidence in the world’s second largest economy.
Exchange Rate Currency Dollar Flag
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Weakened dollar
In the foreign exchange market, the dollar was retreating and headed for a 2% drop this year, after two years of strong gains, with declines reflecting falling yields in the United States. Against a basket of currencies, the dollar was trading at 101.25, moving away from a five-month low of 100.61 hit on Wednesday.
Regarding raw materials, the Chicago wheat and corn futures They recorded the biggest annual drop in a decade, as easing supply bottlenecks in the Black Sea region and rising production weighed on prices.
The oil prices They would close 2023 with a 10% drop, after a year of strong fluctuations driven by geopolitical concerns, production cuts and global measures to curb inflation. On Friday, US crude oil rose 0.7% to $72.06 a barrel, with Brent also gaining 0.7% to $77.69.
Meanwhile, the gold price It rose slightly and was preparing to close its best year since 2020. Spot gold stood at $2,064.7 per ounce.
Source: Ambito
