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Week in Review: 30 December 2024 - 3 January 2025 - New Year Report

Financial Markets

The first two trading days of the year were mixed. 2025 opened with strong selling action, and then recovered somewhat on Friday. The main stock market indices were little changed, with the S&P500 and the NASDAQ 100 losing 0.5% and 0.7%, respectively. The small cap index (Russel 2000) gained 1.1% for the week. This week, trading volumes were still lower than average, which is typical for the holiday season - next week, trading should progressively go back to normal.

The metals were quiet - gold and silver gained 0.7% and 0.8%, respectively. Gold is on the edge of the current trading channel and is starting to look more and more bearish. If there is some momentum left to gold, it should move up soon, other wise we favor the downside - 2500$/oz is the likely target/support in the near term. Silver is looking weaker and might fall to 28$/oz in the near future.

WTI rised 5.5% to 74$ and should continue in the 67-75$ range in the near future.

Bitcoin went up to 97.9k$ this week but it might have topped out. We favor the downside at this point, with the next support at 92k$.

The relative strength of the US dollar (DXY) increased slightly this week (~109). The EUR/USD is around 1.03$, the GBP/USD is at 1.24$, and the USD/JPY is at 157.3 JPY.

US M2 money supply at the date of 28th October 2024 was up by 0.42%.

The national financial conditions index (NFCI) for the week of 23rd December 2024 loosened by 0.4%, which shows a slow but continuous loosening of financial conditions. Note that this indicator is delayed by a week.

US bond yields fell just slightly this week, and now sit at 4.283% for the 2-year and 4.602% for the 10-year

The VIX spiked slightly during the week, but ended unchanged, at ~16, indicating reduced fear in the markets and moderate search for put options from the part of investors/speculators.


Comment Section

We hope you had a good and relaxing holiday season. Similarly to what we said in the last report, there is nothing to extrapolate from this week's trading. We need to wait for the first full week of 2025, which will bring up the volume and may help to establish a new trend - slightly corrective, perhaps, as valuations are a bit too rich in the US stock market!!!
 
Economic challenges in Europe and China, the new Trump government in the US, geopolitics, and a long-promised US recession will make 2025 a very interesting and exciting year.
 
Welcome back, good luck, and happy new year!!!
 
 

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