Global Markets Sunday News
Once is not always enough: Wall Street led the downward slide on the markets this week. From Wednesday, the US indices slumped after US Federal Reserve Chairman Jerome Powell spoke out. He stated that there would be at best two interest rate cuts in the coming year, whereas the Fed had forecast four in September. This announcement triggered massive losses on both sides of the Atlantic. A Christmas rally is therefore doubtful this year.
Translated with DeepL.com (free version)
Tops of the week
Minor Hotels Europe & Americas +35.64 %: The Thai hotel group Minor International has submitted a takeover bid for the capital share in the Spanish subsidiary that it no longer holds. The amount of the offer corresponds to a share price premium of 38%.
Teva Pharmaceuticals +33.88 %: The Israeli pharmaceutical company, which is listed on the New York Stock Exchange, is currently cooperating with Sanofi. Together they want to develop a drug for the treatment of Crohn’s disease and ulcerative colitis. In the current study, the drug candidate met the primary endpoints.
VusionGroup +15 %: The provider of electronic price tags, previously trading as SES-Imagotag, secured a contract with food retailer The Fresh Market.
Darden Restaurants +12.54%: After the restaurant operator reported solid numbers for Q2 of its staggered fiscal year, the company also raised its outlook for the full year.
Wise +10.67 %: The fact that the payment services provider has entered into a partnership with Morgan Stanley underlines the very strong business momentum in recent weeks.
Birkenstock +9.7 %: The well-known sandal manufacturer has presented outstanding figures for the financial year. Sales climbed by 21%. All segments and regions contributed to this growth.
Galderma +7.46 %: The Swiss dermatology group, which went public this year, received FDA approval for its drug Nemluvio for the treatment of atopic dermatitis.
Serco Group +7.07 %: After reporting better business figures in H2 2024, the UK public sector service provider confirmed its outlook for 2025.
Flops of the week
Carbios -21.46 %: The French biochemicals company saw its share price plummet after news that the construction of the PET biorecycling plant in Longlaville had been postponed.
Novo Nordisk -21.86 %: Europe’s most valuable company by market capitalization embarked on a rapid slide at the end of the week. The results of a phase III study on the weight loss drug Cagrisema were not as good as expected.
Micron -12.08 %: The memory chip manufacturer’s outlook was not exactly exhilarating. Nevertheless, the group can look back on a strong quarter with high demand for data center applications. Micron generates half of its sales in this segment.
Vertex -14.33 %: The results of a Phase II study published by the pharmaceutical company for the treatment of lumbosacral radiculopathy were unconvincing.
Zealand Pharma -6.73 %: The second Danish company active in the obesity drug segment suffered a setback in its application for FDA approval for a drug to treat short bowel syndrome.
Cintas -11.5%: It was a steep downhill slide for the uniform manufacturer. Although the company raised its outlook for the delayed financial year, the upward correction should have been even more pronounced given the current valuation level.
Entain -13.18 %: The sports betting and gambling company, which owns the Ladbrokes brand among others, is the subject of investigations conducted in Australia on suspicion of breaching anti-money laundering regulations.
Computacenter -6.79 %: The abrupt departure of CFO Christian Jehle caused disillusionment among investors.
ABB -5.31 %: The market was less than enthusiastic about the acquisition of the power electronics division of a subsidiary of Siemens Gamesa.
Stora Enso -3.31 %: The Finnish paper manufacturer is burdened by a difficult long-term market environment. In view of this outlook, the company made a value adjustment of EUR 724 million.
Commodities
Energy
Oil prices are groaning under the strong US dollar and fears of a slowdown in demand growth in 2025. The dollar index reached its highest level in two years, depressing oil prices and dollar-denominated commodity prices in general. The price of Brent crude is approaching the USD 72 mark again and has lost around 3% in five days. US WTI followed this trend and slipped 4.60% below the USD 70 per barrel mark in the same period.
Metals
The strong US dollar also had a negative impact on the base metals segment. The price of a tonne of copper in London fell to USD 8,880 (spot price). The mood on the market was rather subdued at the end of the year. The price of aluminum fell for five consecutive trading days, dropping to USD 2,507 per tonne (spot price). Zinc (USD 2,967) and lead (USD 1,971) followed a similar trend. Gold did not fare much better, as the precious metal is struggling with rising bond yields. The yield on US government bonds rose to 4.54%, its highest level since May 2024. As a result, the troy ounce recently cost just USD 2,600.
Agricultural products
In the agricultural commodities segment, the price of wheat continued its downward spiral last week in Chicago to 535 cents per bushel (contract maturing in March 2025), while the price of corn stabilized at 440 cents. By contrast, the price of cocoa reached a new high of USD 12,000 per tonne in the middle of the week.
Market sentiment
Nice present! The US Federal Reserve has thwarted investor expectations. The key interest rate cut of 25 basis points was as expected, but Jerome Powell’s speech confirmed what the bond market had long suspected. Since the first rate cut last September, the yield on ten-year bonds has risen steadily from 3.60% to 4.55%. Why? Inflation is persisting, the labor market remains robust and growth is impressive. Against this backdrop, the Fed has had to correct its course, much to the chagrin of investors. Instead of four interest rate cuts in 2025, it is now only holding out the prospect of two. And even these depend entirely on future economic data. As a result, the leading US stock markets faltered sharply in the wake of the bonds. The year-end rally may be over before it has even begun. The Bank of England and the Japanese central bank did not touch their respective interest rate levels this week – as predicted by economic experts.
Crypto currencies
The swings on the crypto markets this week required strong nerves. After reaching a new all-time high of over USD 108,000 on Tuesday, the digital currency has been falling rapidly since Wednesday in the wake of the stock indices. It lost almost 12% within three days and now stands at around USD 93,500. Things are not looking rosy for the Bitcoin spot ETFs either. On Thursday, the exchange-traded products registered in the United States recorded the highest outflows of funds since their launch in January of this year. A staggering USD 680 million flowed out of the ETFs in a single day. Ether lost 19% and recently hovered near the USD 3,000 mark. The prevailing aversion to risk assets at the end of the week could therefore still spoil investors’ Christmas mood.
Outlook
The Christmas week is likely to be quiet, as the stock exchanges will be closed for several days. Euronext will close at 2 p.m. on December 24 and will not reopen until Friday, December 27. The Swiss stock exchange will be closed on December 24, 25 and 26. We will not publish a stock market update on December 27 due to the long break.
Bitcoin | Gold
The path to freedom
Dr. Udo Amend, a renowned expert in the fields of cryptography and finance, has been working intensively on these topics for decades. With his extensive knowledge and experience, he sheds light on the fascinating connections between Bitcoin and gold in his book “Bitcoin | Gold – The Path to Freedom”.
S&P 500 Heatmap
S&P 500 Development in 2024
US Bond Yield
2-years US Bond Yield
10-years US Bond Yield
Market Overview
USD
GOLD
SILVER
WTI
BRENT
BITCOIN
Correlation between the price of gold and the US dollar
