New York (AFP) – Global markets mostly retreated on Monday after traders trimmed bets on US Federal Reserve rate cuts and oil extended a rally sparked by new sanctions on Russia’s energy sector. Equities had tumbled Friday following strong US jobs data that traders viewed as lessening the odds of Federal Reserve interest rate cuts in 2025. Wall Street began the day looking poised to continue that trend. But two of the three major indices finished in positive territory.
LBBW’s Karl Haeling said the market is less overbought compared with a few weeks ago after the sluggish beginning to 2025 equity trading. “The market is showing less sensitivity to higher bond yields,” Haeling said. The Nasdaq finished the day down 0.4 percent, in the red but above its session lows. Stocks losing ground included Nvidia, which criticized fresh curbs on AI chips to China announced by the outgoing Biden administration.
Earlier in the day, bourses in London, Paris, and Frankfurt all finished lower. In Asia on Monday, Hong Kong and Shanghai stocks fell but pared initial losses as data showed Chinese exports and imports topped forecasts in December. Tokyo’s stock market was closed for a holiday. Keenly awaited data on Friday showed the US economy created 256,000 jobs last month, a jump from November’s revised 212,000 and smashing forecasts of 150,000-160,000. It follows data last week that pointed to a rise in inflation expectations, and adds to concerns that President-elect Donald Trump’s plans to slash taxes, regulations, and immigration will reignite prices.
“The robust labor market, along with the recent pickup in inflation, are both making it difficult for the Federal Reserve to justify further rate cuts,” said David Morrison, senior market analyst at Trade Nation. “In fact, some analysts now believe the Fed’s next move may be a hike,” he added. This week’s calendar includes earnings from large banks, as well as economic releases on US inflation and retail sales.
Both major crude contracts extended Friday’s gains — after the United States and Britain announced new sanctions against Russia’s energy sector, including oil giant Gazprom Neft. “The spike in oil prices could pose additional challenges for central banks, particularly the Federal Reserve, if it leads to higher inflation,” said Patrick Munnelly, partner at broker Tickmill Group.
On currency markets, the pound was wallowing around lows not seen since the end of 2023 owing to fading hopes for US rate cuts as well as worries about the British economy. The euro struggled at its weakest level since November 2022.
– Key figures around 2130 GMT –
New York – Dow: UP 0.9 percent at 42,297.12 (close)
New York – S&P 500: DOWN 0.2 percent at 5,836.22 (close)
New York – Nasdaq Composite: DOWN 0.4 percent at 19,088.10 (close)
London – FTSE 100: DOWN 0.3 percent at 8,224.19 (close)
Paris – CAC 40: DOWN 0.3 percent at 7,408.64 (close)
Frankfurt – DAX: DOWN 0.4 percent at 20,132.85 (close)
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 18,874.14 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,160.76 (close)
Tokyo – Nikkei 225: Closed for a holiday
Euro/dollar: DOWN at $1.0224 from $1.0244 on Friday
Pound/dollar: DOWN at $1.2180 from $1.2207
Dollar/yen: DOWN at 157.65 yen from 157.73 yen
Euro/pound: DOWN at 83.90 pence from 83.92 pence
Brent North Sea Crude: UP 1.6 percent at $81.01 per barrel
West Texas Intermediate: UP 2.9 percent at $78.82 per barrel
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© 2024 AFP
