Market Report:
🎉 Bitcoin surpasses the 100k barrier. This date will be remembered in the future. Congratulations Holders.
🇺🇸 U.S. markets set new benchmarks. Following impressive earnings from Salesforce and Marvell Technology, tech shares led the charge as all three of the main U.S. indices closed at all-time highs on Wednesday. The Nasdaq Composite gained 1.3% and the S&P 500 increased 0.61%, closing at 19,735.12 and 6,086.49, respectively.
🇫🇷 French President Emmanuel Macron is seeking a new prime minister after his government was ousted in a no-confidence vote. The motion was triggered by a budget dispute, with Macron’s government proposing €60 billion in tax hikes and spending cuts to reduce the deficit. The new premier will face similar financial pressures as former PM Michel Barnier’s administration. The political turmoil has unsettled investors, with euro and French bond futures showing volatility. The chaos in France raises concerns about European stability and crucial legislation passage.
🇩🇪 The German economy is expected to contract by 0.2% next year, compared to the 0.8% expected in the euro zone, according to the German Economic Institute IW. The service sector is expected to compensate for the declines in the industrial and construction sectors. The unemployment rate is expected to rise to 6.2% in 2025. “This is no longer just a cyclical downturn, but a severe structural crisis,” IW chief economist Michael Groemling said. The collapse of Germany’s ruling coalition is expected to further exacerbate the economic situation. The upcoming government must focus on corporate tax reform, infrastructure investments, and reduced bureaucracy to make Germany competitive again.
🇬🇧 British companies face a challenging 2025 due to increased employment costs and potential tariffs on exports. The British Chambers of Commerce revised down its forecasts for net trade, expecting contraction by 1.4% in 2025 and 1.5% in 2026. Earnings growth is expected to slow due to increased costs, including higher social security contributions and a 6.7% rise in the minimum wage.
🏦 Federal Reserve Chair Jerome Powell has suggested yesterday a potential slowdown in interest rate cuts due to the stronger U.S. economy and higher inflation. He believes the Fed can be more cautious in its policy approach due to the stronger growth and higher inflation. Powell aligns with a more cautious bloc of policymakers, but does not rule out further rate cuts due to economic uncertainty. Overall, Powell’s comments suggest the Fed may slow the pace of rate cuts.
📈 The Federal Reserve’s latest Beige Book report indicates the U.S. economy has expanded slightly in most regions since early October. Economic activity was generally small, but expectations for growth rose moderately across most geographies and sectors. One key inflation measure, PCE, the 12-month change in the personal consumption expenditures price index excluding food and energy, has remained stuck well above the Fed’s 2% target. Overall, the Beige Book paints a picture of a modestly expanding economy with some optimism.
📊 Market view:
🇺🇸 US markets continue to approach new highs on a daily basis. At the moment, the Mini S&P 500 futures are trading at 6,095 points, having reached 6,100 points during yesterday’s session. The Nasdaq 100 has broken above 21,500 points and is currently pausing at exactly that level.
💹 The dollar index remains sideways at 106.10 points. Meanwhile, the EUR/USD is trading above 1.0530, which is surprising considering the economic and political tensions in Europe. Fed’s Powell seems to suggest that rate cuts could be a long time coming, but the dollar DXY index pattern indicates otherwise with a fairly sharp HCH figure.
🇪🇺 On the European scene, the supposed ‘collapse’ of the French government and the German government seem to belong to a parallel universe, as European equities continue to rally strongly. The DAX 40 has reached new all-time highs for the second time this week, currently standing at 20,237 points.
📉 In addition, the EuroStoxx 50 has finally broken through the 4,850-point barrier and is currently trading above 4,915 points.
🛢️ On the other hand, Brent crude oil, which had recently reached 74 dollars, has fallen back again and is now trading at 72.35 dollars. In the gold market, the charts show the formation of a wedge that seems to anticipate a significant volatility event. However, the precious metal remains static at 2,675 dollars per ounce.
🌐 Finally, as we mentioned at the beginning of this report, Bitcoin has managed to surpass the historical barrier of 100,000 dollars for the first time, marking a transcendental milestone in the cryptocurrency market.
🌍 Geopolitics:
🇷🇴 Romanian presidential candidate, Georgescu, has won the first round of voting, raising concerns about the country’s future direction. Georgescu has criticized NATO membership benefits and advocated for “neutrality” towards Russia. His victory comes at a sensitive time, as Romania shares a long border with Ukraine and has provided military aid and port access to support Kyiv. Georgescu’s attempts to present himself as an ally of former US President Trump could potentially lead to cordial relations with Washington.
🇺🇦 Ukrainian allies are shifting their focus from absolute military victory to positioning President Volodymyr Zelenskyy for potential high-level negotiations. The OTAN is reducing efforts to send more armas to Ukraine, raising concerns about a potential tregua. Zelenskyy is seeking security guarantees for Ukraine’s remaining parts, despite Russia’s rapid advances. Ironically, Ursula von der Leyen assured us in 2022 that Putin was finished and that the Russian army was using washing machine chips for its weaponry. Disinformation from our European leader? The press does not talk about this.
🚨 Tucker Carlson says the United States is in a hot war with Russia because of the Biden administration. We are closer to nuclear war than in anytime in history.
🔥 The First Brics War. An article published by The Cradle raises an interesting point on Syrian War: The Rent-a-Jihadi coalition offensive in Syria, allegedly coordinated by the US and Israel, led to the capture of Aleppo. Ukrainian advisors played a crucial role in providing drones, GPS systems, and electronic warfare capabilities to the jihadist forces. Turkey’s role in this operation is unclear, and the fall of Aleppo demonstrates the Syrian government’s failures. The US and Israel’s efforts to undermine the “Axis of Resistance” led by Iran could lead to the “First BRICS War” if not handled carefully.
🇷🇺🇰🇵 On the other hand, US State Department says that Russia will help North Korea develop better ballistic missiles and advanced nuclear weapons.
