United States
A relatively quiet pre-Christmas session on Wall Street still delivered fresh record highs, with US equities extending their year-end rally in shortened holiday trading. The S&P 500 rose 0.3% to finish above 6,930, marking its fifth consecutive day of gains, while the Nasdaq 100 added 0.3% and the Dow Jones Industrial Average climbed 0.6%. Broader global equities also edged higher, with the MSCI World Index up 0.2%.
Bond markets were subdued, with Treasury yields edging lower. The 10-year US Treasury yield slipped three basis points to 4.13%, while the 2-year and 30-year yields also declined by three basis points. Currency moves were minimal, with the US dollar little changed overall.
Economic data showed weekly applications for US unemployment benefits falling, reinforcing the picture of a labour market experiencing relatively low layoffs despite ongoing economic uncertainty. Markets continued to price in expectations for two quarter-point rate cuts next year, one more than the Federal Reserve’s median projection.
Equity market participation continued to broaden, with a greater number of stocks contributing to gains. Volatility remained exceptionally low, with the VIX hitting its lowest level of the year. The S&P 500 is now up nearly 18% year-to-date, heading towards a third consecutive double-digit annual gain.
Corporate developments included Nvidia agreeing to a licensing deal with artificial intelligence startup Groq, Intel shares falling after a report suggested Nvidia had halted a chip manufacturing test, and Nike rising after a filing showed Apple chief executive Tim Cook had purchased $2.95 million worth of shares. Elsewhere, Sanofi agreed to acquire Dynavax Technologies for about $2.2 billion, while BP moved to sell a majority stake in its Castrol lubricants business.
Europe
European markets were muted in thin holiday trading, with many major exchanges closed for Christmas. The UK’s FTSE 100 slipped 0.2% in a half-day session, while France’s CAC 40 Index was little changed. Trading volumes across the region were well below average, with markets in Germany, Italy, Denmark, Switzerland and Finland closed.
Sanofi shares dipped after the company said the US Food and Drug Administration had issued a complete response letter for its experimental multiple sclerosis drug, partially offsetting attention on its agreed acquisition of Dynavax. BP closed 0.4% lower following confirmation of the Castrol divestment, which values the business at $10.1 billion including debt.
Despite the quiet session, the broader Stoxx 600 continues to scale record highs and is on track for a third straight year of gains. European bond markets were largely unchanged, with Germany’s 10-year yield steady at 2.86% and Britain’s 10-year yield flat at 4.51%.
Australia
The Australian sharemarket finished the shortened pre-Christmas session lower but still capped its strongest weekly performance in more than a month. The S&P/ASX 200 fell 33 points, or 0.4%, to close at 8,762.7, with 10 of the 11 sectors ending in the red. Despite the pullback, the benchmark index rose 1.6% over the week, with the market next reopening on December 29.
Healthcare stocks weighed on the index, with CSL down 2.4% and ResMed falling 2.1%. Monash IVF tumbled 10.4% after a consortium withdrew its takeover offer. Retail stocks were also weaker ahead of Boxing Day sales, with Wesfarmers and Guzman y Gomez both finishing lower.
Materials continued to provide support, underpinned by record-high copper and gold prices. Rio Tinto and South32 posted modest gains, while gold producers Northern Star and Perseus advanced. Lithium miners also rallied as lithium prices hit their highest levels since November 2023, with Pilbara Minerals jumping 6.3% and Liontown Resources up 4.7%.
Among individual stocks, Treasury Wine Estates surged 7.6% after a Luxembourg-based investor increased its stake to more than 5%. Lendlease rose 4.6% after securing the Sydney Metro Hunter Street West over-station development, while DroneShield gained on a new Asia-Pacific defence contract. Seven West Media rose in its final session following completion of its acquisition, and NextDC edged higher after receiving development approval for a major Sydney data centre.
Commodities and currencies
Commodity markets were steady after recent strong moves. Spot gold eased 0.1% to $4,479.42 an ounce, holding near record levels following a rally that briefly pushed prices above $4,500. West Texas Intermediate crude was little changed.
Currency markets were quiet, with the Bloomberg Dollar Spot Index down 0.1%. The euro slipped to $1.1778, sterling edged lower to $1.3500, and the Japanese yen strengthened slightly to 155.96 per US dollar. In digital assets, Bitcoin eased 0.1% to $87,565.85, while Ether fell 1% to $2,942.88.
Economic Calendar
No major data
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
