World shares exhibited a predominantly positive trend on Tuesday, albeit in thin trading conditions due to holiday influences and anticipation surrounding forthcoming U.S. economic data. Futures for both the S&P 500 and the Dow Jones Industrial Average edged up by less than 0.1%. In Europe, Germany’s DAX rose slightly by 0.1% to reach 24,318.93, whereas the CAC 40 in Paris saw a minor decline of 0.2% to settle at 8,105.88. Meanwhile, Britain’s FTSE 100 increased by 0.1%, climbing to 9,873.63.
In a notable development for precious metals, gold prices surged by 1% early Tuesday, reaching a new peak at $4,512.00 an ounce, adding to the momentum seen throughout the year. Silver also enjoyed a boost, rising by 1.4% to settle at $69.52 an ounce.
In Asian markets, Tokyo’s Nikkei 225 remained relatively unchanged at 50,412.87. The U.S. dollar weakened against the Japanese yen after officials in Tokyo indicated potential market intervention should the yen continue to depreciate. The dollar was trading at 155.95 yen, a drop from 157.04 yen the previous day. Following the Bank of Japan’s decision to raise its key policy rate, the yen experienced a temporary weakening, prompting the Finance Ministry to express concerns over abnormal currency fluctuations.
Alex Kruptsikevich of FXPro highlighted the market’s reaction, noting, “The hint of currency intervention proved to be such a serious threat that the yen, which had been significantly oversold after the Bank of Japan meeting, rose from the ashes.”
The euro experienced an uptick, climbing to $1.1797 from $1.1762. Conversely, Hong Kong’s Hang Seng index retraced early gains, declining by 0.1% to 25,774.14 while the Shanghai Composite index managed a slight increase, moving up by 0.1% to 3,919.98. South Korea’s Kospi rose by 0.3% to 4,117.32, aided by a significant 12.5% spike in shares of shipbuilder Hanwha Ocean, following news that it would assist in constructing a new class of U.S. battleships at its shipyard in Philadelphia. The S&P/ASX 200 in Australia followed suit, rising by 1.1% to 8,795.70. Taiwan’s Taiex advanced by 0.6%, while India’s Sensex remained relatively stable.
The U.S. markets are slated to close early on Wednesday in observance of Christmas Eve and will remain shuttered on Thursday for Christmas. The upcoming week is characterized by an array of economic reports that may provide insights into the state and direction of the U.S. economy.
Later Tuesday, the government is expected to unveil the first of three estimates on gross domestic product (GDP), a critical indicator of economic performance for the third quarter. Additionally, a weekly update from the Labor Department regarding jobless benefit applications—an important measure of layoffs in the U.S.—is set to be released on Wednesday. Also on Tuesday, the Conference Board is poised to issue results from its consumer confidence survey for December.
On Monday, major indices showed positive momentum, with the S&P 500 rising by 0.6% and the Dow Jones gaining 0.5%. The Nasdaq composite also saw a 0.5% uptick. Notably, smaller companies outperformed other sectors, with the Russell 2000 index leading with a 1.2% gain.
In the oil market, prices edged upwards following a previous rise of over 2% on Monday after the U.S. Coast Guard reported pursuing another sanctioned tanker in the Caribbean. U.S. benchmark crude added 7 cents to $58.08 per barrel while Brent crude, the international standard, gained 11 cents to reach $62.18.
Recent reports indicate persistent high inflation in the U.S. and a decline in consumer confidence over the past year. Overall, the job market has shown signs of slowing and retail sales have experienced a downturn. The ongoing U.S. trade war continues to pose challenges for consumers and businesses facing rising prices. This complex economic landscape, featuring both stubborn inflation and a weakening job market, presents a tricky policy environment for the Federal Reserve moving forward. Nevertheless, Wall Street largely anticipates that the Fed will maintain its current interest rates during its meeting in January, having reduced its benchmark interest rate at the past three meetings even as inflation persists well above the 2% target.
