Today’s News
Asian markets showed mixed performance on December 5, following record highs on Wall Street, fueled by a softer-than-expected U.S. services report that raised optimism about potential interest rate cuts by the Federal Reserve. The S&P 500, Nasdaq, and Dow all reached new all-time highs, while Bitcoin made another push toward the USD 100,000 mark, a key psychological milestone for cryptocurrency.
Image Source: eToro
Rate Cut Expectations Boost Stocks
Market expectations for a U.S. rate cut in 2025 have grown, with the probability of a cut in December jumping from a near-zero chance to about 75%. This shift has supported broader market sentiment, contributing to gains in the U.S. stock market and driving Bitcoin to near USD 98,200 in Asia morning trade. Bitcoin’s surge has been attributed to growing institutional interest, particularly following the approval of exchange-traded funds (ETFs) this year.
Despite the optimism, Asian stocks were more mixed. MSCI’s broad index for Asia-Pacific shares outside Japan edged lower in early trading, as losses in Hong Kong weighed on overall sentiment, though Japan’s Nikkei rose about 0.6%, reaching a three-week high. Hong Kong’s Hang Seng, however, fell by around 0.8%. The dollar also weakened, tracking lower U.S. Treasury yields, which dropped to 4.182% following the ISM services data.
In the U.S., Federal Reserve Chair Jerome Powell made balanced remarks at a New York Times event, indicating that while the economy remains robust, he did not dismiss the market’s pricing of rate cuts.
Image Source: Wall Street Journal
Image Source: The Australian
Meanwhile, Fed Governor Christopher Waller signaled a leaning towards a rate cut in December. Su-Lin Ong, RBC Capital Markets’ chief economist in Sydney, pointed out that while U.S. data remains resilient, the market may have priced in too much. “We think the market has got too much priced in,” Ong said, referring to the solid growth expectations for the U.S. economy in the fourth quarter.
In other markets, the euro remained under pressure at USD 1.0514, weighed down by political unrest in France, where the government lost a confidence vote for the first time since 1962. The yen held steady at 150.31 per dollar, as expectations for a rate hike in Japan unwound following reports that policymakers were likely to exercise caution. The Australian dollar weakened following disappointing growth data.
Oil prices saw modest gains ahead of an OPEC+ meeting, where an extension of production cuts is expected. Brent crude futures rose 0.2% to USD 72.42 a barrel. Meanwhile, iron ore prices were supported by ongoing expectations of stimulus measures in China, and gold prices held steady at USD 2,649 an ounce.
Bitcoin’s Surge and Institutional Growth
Bitcoin’s recent rise, which has seen it approach USD 100,000, has been closely linked to expectations that the incoming U.S. administration under President-elect Donald Trump will be crypto-friendly.
Geoff Kendrick, global head of digital assets research at Standard Chartered, commented, “At the end of the day, it’s just a number. But the reality is we’ve been able to get to this level because the industry has become institutionalized this year particularly – and that’s mostly the ETF inflows.”
Other News
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Nissan CEO Makoto Uchida faces intense pressure to turnaround the company amidst weak sales in key markets and declining stock value.
Musk’s xAI to Expand Memphis Supercomputer
Elon Musk’s xAI plans to significantly expand its Memphis-based supercomputer, Colossus, to one million GPUs, increasing its capacity tenfold.
TSX Nears All-Time High on Tech Gains
The Toronto Stock Exchange’s TSX index approached a record high, driven by a 1.5% rise in tech stocks and strong earnings from Royal Bank of Canada.
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