Weekly Market Update

Author : The BlackSummit Team
Date : December 7, 2024

Global Market News

Global Equities Extend Rally

Global equities made gains his week with the Nasdaq soaring 3.34% while the S&P 500 moderately gained 0.96%. On the other hand, the Dow Jones lost 0.60%. The US 10-year Treasury note dropped to 4.15%, its lowest level since mid-October. The price of a barrel of West Texas Intermediate crude oil declined to $67.20. Volatility, as measured by the CBOE Volatility Index, dropped more than 8% over the week to close Friday at 12.77.

Updated Market Figures

US Payrolls Rebound

The US reported that nonfarm payrolls rose 227,000 in November, rebounding significantly from the 36,000 figure in October when several storms and strikes significantly disrupted hiring. The unemployment rate rose slightly to 4.2% from 4.1%, and the Bureau of Labor Statistics’ household survey for November showed a drop of 355,000 employed people on top of the decrease of 368,000 in October. Following the release of job data, futures markets began pricing in a 90% chance of a rate cut by the Federal Reserve in December.

International Developments

South Korea’s Yoon’s Martial Law Gamble Backfires

On December 3rd, South Korean President Yoon Suk Yeol declared martial law, claiming it was necessary to protect the nation from “anti-state forces.” Yoon’s declaration, which would have given him broad powers to control political activities, the media, and labor unions, was quickly met with opposition. Only six hours after it was imposed, the National Assembly, where the opposition holds a majority, unanimously voted to end martial law, forcing Yoon to rescind his decree. Now facing calls to resign and potential impeachment proceedings, Yoon’s approval ratings have plummeted, leaving his political future uncertain. If the impeachment is successful, new elections would be triggered within 60 days and Prime Minister Han Duck-soo, viewed as a centrist, would likely act as president in the interim

French Government Collapses with Wednesday’s No-Confidence Vote

French Prime Minister Michel Barnier was ousted in a no-confidence vote on Wednesday, just three months after being appointed. A total of 331 members of parliament voted in support of the motion, well exceeding the 288 votes needed for it to pass. The vote was triggered by Barnier’s decision to bypass parliament and use a presidential decree to enact social security reforms and pass a budget that included €60 billion in deficit reduction. Barnier will now submit his resignation but is expected to stay on as caretaker prime minister until President Emmanuel Macron chooses a successor.

Renewed Syrian Conflict Shakes Assad Regime

After years of relative calm, the Syrian civil was has reignited with a rebel offensive led by the militant group Hayat Tahrir al-Shams (HTS). Beginning around two weeks ago, the offensive has resulted in the rebel capture of Aleppo, Syria’s second-largest city, and the city of Hama. HTS forces are now approaching the strategically important city of Homs, threatening to cut off the capital, Damascus, from President Bashar al-Assad’s coastal strongholds. The renewed fighting has resulted in over 820 deaths, including more than 100 civilian casualties, and has displaced tens of thousands of people. HTS leader Abu Mohammad al-Jawlani has stated that the ultimate goal of the offensive remains the overthrow of the Assad regime.

US Social & Political Developments

Trump Threatens Tariffs on Major Trading Partners

On November 25th, President-elect Donald J. Trump announced his intention to impose tariffs on all goods from Canada, Mexico, and China on his first day in office. He threatened a 25% tariff on Canadian and Mexican goods and an additional 10% on Chinese imports. These tariffs, which would target countries responsible for over a third of US imports and nearly $1.5 trillion in goods and services in 2023, were presented as a response to the flow of drugs and migrants into the United States. The announcement sparked immediate concern in the affected countries, with warnings of economic chaos and retaliatory measures. It also raised questions about the future of the USMCA trade agreement.

Potential Biden Pardons Spark Debate

Outgoing President Joe Biden is considering pre-emptive pardons for individuals who have publicly criticized his successor, Donald Trump. These potential pardons, which could include figures like Dr. Anthony Fauci and Senator-elect Adam Schiff, aim to protect them from potential retaliation by Trump when he takes office. The move has drawn criticism from both Republicans and some Democrats, particularly given the recent controversy surrounding Biden’s pardon of his son, Hunter, on tax and gun charges. While the White House has confirmed that more pardons are expected before Biden’s term ends in January, they have not provided specific details, leading to speculation and debate about the potential recipients and the implications of such pre-emptive pardons.

Corporate/Sector News

Bitcoin Surges Past $100,000

This week, Bitcoin’s price surpassed the significant $100,000 milestone, reaching $103,400. This surge is attributed in part to the recent US Presidential election, with President-elect Donald Trump’s pro-cryptocurrency stance and his appointment of Paul Atkins, seen as a cryptocurrency advocate, to head the Securities and Exchange Commission (SEC). Further fueling the upward trend is the SEC’s approval of several spot Bitcoin exchange traded funds (ETFs), allowing major investment firms like Blackrock, Fidelity, and Grayscale to offer Bitcoin-based products, some of which have already attracted billions of dollars in investment. However, experts caution that Bitcoin’s notorious volatility persists, and investors should remain wary of potential price drops, particularly given the lack of protection for Bitcoin investments.

US Imposes New Semiconductor Sanctions on China

On December 2nd, the Biden administration imposed new export controls on China, targeting the sale of advanced semiconductor manufacturing equipment and high-bandwidth computer memory. The administration banned the sale of 24 types of equipment and 3 software tools used to produce advanced node semiconductors, which are the fastest and most efficient chips on the market. These sanctions also restrict the sale of high-bandwidth memory, which is crucial for advanced node semiconductor performance in fields like artificial intelligence. The US government also blacklisted 140 Chinese companies, mostly in the domestic semiconductor manufacturing industry, restricting American businesses from engaging with them without a federal license.

UnitedHealthcare CEO Fatally Shot in Manhattan

On Wednesday, Brian Thompson, the CEO of UnitedHealthcare, was fatally shot in Midtown Manhattan, New York City, in what police are calling a “premeditated, preplanned, targeted attack”. The assailant, who remains at large, approached Thompson from behind and shot him at least twice, once in the back and once in the right calf, before fleeing the scene on an e-bike. Police have released images of the suspect and are offering a $10,000 reward for information leading to an arrest and conviction. The words “delay” and “depose” were found on ammunition connected to the shooting, prompting investigators to explore whether the motive relates to a common insurance industry strategy: “delay, deny, defend.”. A source revealed that UnitedHealth Group was aware of threats made against its executives, although none specifically mentioned Thompson.

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