Global Market Update:
Key Developments in Equities, Crypto, and Economic Trends
Weekly Highlights
Equities
Equity markets remained resilient this week, buoyed by strong revenue reports in AI and semiconductor sectors. U.S. equity inflows surged to a record high following the election, supporting a stronger USD during the same period.
ECB
The European Central Bank cut its interest rate by 25 basis points (bps) this week, signaling more reductions in 2024 to address inflationary concerns. Officials anticipate further 25 bps cuts in January and March but emphasized a data-dependent approach. Discussions on the neutral rate are expected to continue into next year.
Oil
OPEC adjusted its global demand growth forecast downward for next year, though the overall projection remains robust. Oil prices climbed, driven by concerns over tighter sanctions on Iran and Russia.
AI
Artificial intelligence continues to drive growth beyond traditional tech sectors, becoming a key catalyst for energy demand. Electricity demand is expected to accelerate from 2.5% to 3.4% annually over the next two years. Additionally, the deployment of energy transition technologies will increase demand for essential metals used in energy storage and infrastructure development.
Market Performance (5-Day Changes Ending Friday)
Nasdaq: 19,926.72 (+0.34%)
S&P 500: 6,051.09 (-0.64%)
Dow Jones: 43,828.06 (-1.82%)
10-Year Yield: 4.39% (+24 bps)
Brent Crude Oil: $74.34 (+4.62%)
DXY (Dollar Index): 106.94 (-0.92%)
Analyst Views
Equity Markets
#1. Goldman Sachs: Post-election optimism has lifted small and mid-cap stocks, reflecting strong small-business sentiment. Record-high equity inflows and expectations for M&A recovery, driven by potential regulatory rollbacks, remain key market drivers.
#2. Morgan Stanley: Despite high valuations, contrarian indicators like an unfavorable put/call ratio, low implied volatility, and stretched long positions, market sentiment remains strong. While these expectations leave little room for error, downside risks appear limited.
Fixed Income
#1. Morgan Stanley: Rising yields reflect expectations of stronger real growth and inflation in the U.S., coupled with a potential repricing of the neutral policy rate. While 2025’s projected rate cuts have dropped from 160 bps to 80 bps, equities have shown resilience.
#2. UBS: High-quality bonds remain a compelling choice for long-term diversification, particularly as lower rates reduce cash returns. Historically, bonds outperform cash in the long run.
Economic Outlook
UBS: The Fed’s continued rate cuts hinge on inflation trends, with shelter costs remaining a key driver. While slower than anticipated, shelter costs are expected to ease gradually. Tariffs are unlikely to cause sustained inflationary pressures over the medium term.
Standard Chartered: Central bank policy will play a pivotal role in balancing growth and inflation. Further fiscal easing and rate cuts are likely to support a soft-landing or no-landing scenario for the U.S. economy.
Week in Review: Crypto Highlights
#1. Bitcoin surpassed $100,000, cementing its status as "digital gold" and a store of value in decentralized finance.
#2. Amazon shareholders urged its board to consider Bitcoin investments, while Phantom Wallet integrated the SUI blockchain.
#3. Solana developments included Pudgy Penguins announcing a Solana-based token (PENGU) and Pump.fun shutting access to UK traders due to regulations.
#4. SushiSwap revealed its 2025 product roadmap, featuring platforms like Wara (trading), Susa (on-chain DEX), and Blade (AMM solution).
#5. Solana's Jupiter Exchange added RFQ functionality, offering gasless swaps and access to combined liquidity sources.
Cryptocurrency Technical Analysis
BTCUSD
Bitcoin reached an all-time high of $103,650, marking a significant milestone from its origins at just $0.05. Institutional adoption, spot ETFs, and favorable political developments continue to fuel demand. Analysts suggest Bitcoin is now closer to mainstream adoption, supported by passive inflows from mutual and retirement funds.
Key Levels: 92,000 / 100,000 / 103,650
ETHUSD & ETHBTC
Ethereum broke past the $4,100 resistance, building on recent momentum. Renewed interest may stabilize ETHBTC at 0.04, though Bitcoin remains the primary focus due to its geopolitical and macroeconomic relevance.
Key Levels: 2,800 / 3,000 / 3,500 / 4,100
Upcoming Economic Events
Dec. 11: U.S. Bureau of Labor Statistics releases November CPI data.
- Core Inflation Rate YoY: Prev. 3.3%
- Inflation Rate YoY: Prev. 2.6%
Dec. 11: Bank of Canada announces its policy interest rate. Prev. 3.75%.
Dec. 12: ECB announces monetary policy decisions.
- Deposit Rate: Prev. 3.25%
- Main Refinancing Rate: Prev. 3.4%
- Marginal Lending Rate: Prev. 3.65%.
Desk Commentary: Market Trends and Activity
Forex and Commodities:
#1. The Australian dollar fell 2% against the USD due to weaker-than-expected GDP growth of 0.3% QoQ, missing the forecast of 0.4%.
#2. U.S. non-farm payrolls and unemployment rates outperformed expectations, supporting the USD.
Cryptocurrencies:
#1. Major cryptocurrencies like BTC, ETH, and SOL saw profit-taking as clients locked in gains. Altcoins like HBAR, IMX, SUI, and XRP attracted buyers optimistic about future gains.
#2. Trading activity in EUR, NZD, and GBP increased, as global clients leveraged cross-border banking rails.