MARKET WRAPS
Stocks:
European shares moved higher on Friday in quiet trade on the
final trading day of the year.
Traders are turning cautious after strong gains for equities in
recent weeks due to growing expectations that central banks will
cut interest rates next year.
"There will still be a hangover and a correction period after a
relentless two-month rally triggered a broad-based risk euphoria
among investors," Swissquote said.
For rate cuts to boost stocks, they will need to be accompanied
by a strong economy and solid earnings expectations, it added.
London's FTSE100 looks set to end the year only 3% higher, far
below its European rivals, with the Stoxx Europe 600 up 11.5%,
Germany's DAX index up 19% and France's CAC-40 up 15%, according to
FactSet.
Concerns about a weak U.K. economy and persistent inflation have
hampered the U.K. blue chip index, Hargreaves Lansdown said.
"It looks as though the FTSE 100 will have moved largely
sideways for the year, thanks in large part to extreme uncertainty
and the upwards march of interest rates."
Inflation is at risk of remaining "stubbornly" above the Bank of
England's 2% target, limiting scope for interest-rate cuts,
Hargreaves Lansdown added.
Economic Insight
Once 2024 gets underway, focus for U.K. equity traders will soon
turn to how retailers fared over Christmas when they report on this
crucial period in a couple of weeks' time, but the signs aren't
good, Hargreaves Lansdown said.
"Short sellers are circling some areas of the [retail] sector in
the expectation of bad news," it said.
A combination of higher prices and a higher cost of living
eating into consumers' disposable incomes, plus competition from
online options, means momentum for these companies "has become even
harder to harness."
U.S. Markets:
Stock futures were higher, as markets are ending 2023 on a hot
streak.
All three indexes are on pace for a ninth consecutive weekly
gain. For the S&P 500, that would mark the longest streak since
January 2004. The index is now within 0.3% of its all-time high,
set in January 2022.
Forex:
The dollar recovered after falling to a five-month low against a
basket of currencies this week, helped by a rebound in Treasury
yields following a weak sale of 7-year Treasury bonds, and could
rise further in early 2024, Swissquote said.
"I wouldn't be surprised to see the dollar recover against most
majors in the first weeks of next year."
Either European Central Bank officials talking of possible
interest-rate cuts and/or the Federal Reserve retreating from
rate-cut talk could see EUR/USD ease, Swissquote added.
Energy:
Oil prices moved higher, but were still set for a weekly decline
as demand concerns hit key benchmarks.
Despite the move higher, prices over the week were still set to
fall 1.4% and 1.8% for Brent and WTI, respectively.
Brent and WTI were both also set to end the year roughly 10%
lower, as slow economic growth slashes demand for oil.
Metals:
Base metals prices were higher while gold edged lower, with thin
trading during the festive period not sending a signal one way or
the other.
Metals have had a volatile year, with gold hitting a new record
high, while shifts in demand have pushed and pulled base metals
both sharply up and down.
Overall, copper is set to end the year just over 3% higher,
while aluminum is roughly flat. Gold is up 14%, reflecting the
stellar run the precious metal has had this year.
EMEA HEADLINES
Spanish Inflation Holds Steady in December
The rate of annual inflation in Spain held steady in December,
keeping price rises stable but above the wider eurozone
average.
The country's consumer-price index rose by 3.3% on a yearly
basis, the same rate as a month earlier, according to figures set
out Friday by national statistics agency INE. The rate is
harmonized to European Union standards and was in line with the
expectations of economists polled by FactSet.
Why Europe's Oil Majors Beat Exxon and Chevron in 2023
For the first time in five years, big European oil companies
outperformed their U.S. counterparts in 2023.
That doesn't signal a changing of the guard-the U.S. firms are
still more richly valued by investors. Instead, it appears the
Europeans have been taking some cues from the American oil
playbook, turning more attention to their core oil businesses, and
emphasizing shareholder returns.
Biden Struggles to Push Trade Deals With Allies as Election
Approaches
WASHINGTON-The Biden administration on Thursday extended for two
years a temporary measure to suspend Trump-era tariffs on European
steel and aluminum, the latest sign that the president is finding
it difficult to resolve trade frictions as an election year
approaches.
Washington and Brussels have failed to find a permanent solution
to eliminate the levies more than two years after the negotiations
began. With the announcement, the administration will keep in place
a temporary import quota system that replaced Trump-era tariffs
while talks continue. The EU has criticized the temporary fix,
which could be undone if Biden isn't re-elected.
GLOBAL NEWS
What Did Wall Street Get Right About Markets This Year? Not
Much
Almost no one thought 2023 would be a blockbuster year for
stocks. They could hardly have been more wrong.
The Federal Reserve raised interest rates at the fastest clip
since the 1980s, a regional banking crisis felled Silicon Valley
Bank, and war broke out in the Middle East. Yet stocks kept
climbing.
China Central Bank to Help Boost Consumer Prices Amid Deflation
Risks
China's central bank has vowed to boost consumer prices as the
world's second-largest economy is battered by tepid demand and
weakening confidence.
The People's Bank of China said it would "promote price recovery
from low levels and keep prices at reasonable levels," according to
a statement released late Thursday summarizing the central bank's
fourth-quarter monetary policy meeting.
Civil War Gaffe Undercuts Nikki Haley's 2024 Pitch
Republican Nikki Haley, who until this week had run a
disciplined and largely error-free presidential campaign, has been
forced into an uncomfortable and unexpected new chore: doing
cleanup on a blunder related to the Civil War and slavery.
The former South Carolina governor and United Nations ambassador
was forced into defensive mode after she omitted slavery from an
answer she gave at a New Hampshire campaign event where she was
asked what prompted the Civil War. Her long-winded response avoided
giving the answer to a basic question most learned in grade school,
teeing up a barrage of criticism from political foes.
Maine Becomes Second State to Bar Trump From 2024 Primary
Ballot
Maine's top election official Thursday barred Donald Trump from
appearing on the state's primary ballot, the second time a state
knocked the Republican former president off its ballot and
escalating a national legal effort to disqualify him from
office.
In a 34-page written decision, Maine Secretary of State Shenna
Bellows, a Democrat, said the Constitution bars a second Trump term
because of his actions surrounding the Jan. 6, 2021, attack on the
U.S. Capitol following his loss in the 2020 presidential
election.
The New Star on the Political Scene: The Chip Industry
Semiconductors have played the starring role in state visits.
Nvidia's chief executive was feted by heads of state like a
visiting dignitary. Government delegations have shuttled around the
globe hobnobbing with chip makers.
For an industry that suddenly finds itself as a geopolitical
showpiece, the attention is a mixed bag.
Write to ina.kreutz@wsj.com
Write to us at newsletters@dowjones.com
We offer an enhanced version of this briefing that is optimized
for viewing on mobile devices and sent directly to your email
inbox. If you would like to sign up, please go to
https://newsplus.wsj.com/subscriptions.
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
December 29, 2023 06:00 ET (11:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Jun 2024 to Jul 2024
FTSE 100
Index Chart
From Jul 2023 to Jul 2024