US stocks fell sharply on Friday, with the Dow dropping 697 points after a robust December jobs report diminished expectations for Federal Reserve rate cuts. The economy added 256,000 jobs, lowering the unemployment rate to 4.1%, which led to a surge in bond yields, with the 10-year Treasury yield reaching 4.79%. Economists now believe the Fed's cutting cycle may be over, citing a resilient labor market and persistent inflation risks.
The stock market is poised for a strong 2024, with the S&P 500 up nearly 28% and a solid economic backdrop. However, a 10% correction is anticipated in 2025 due to market delicacy, investor sensitivity to bad news, and historical trends showing frequent pullbacks. Long-term investors are advised to remain calm and prepared, as corrections often lead to new highs.
The BRICS alliance is set to expand in 2025, with growing interest from African nations eager to join. This expansion could enhance bilateral trade and local currency settlements, appealing to developing countries seeking alternatives to the US dollar. Additionally, discussions around cryptocurrency adoption are intensifying, with proposals for an electronic payment infrastructure that may position Bitcoin as a viable alternative to the dollar, potentially reshaping global economic dynamics.
Economist Jeremy Siegel predicts that BRICS nations may eventually replace US dollar reserves with Bitcoin, highlighting its potential as a global currency. Despite former President Trump's mixed messages on cryptocurrency and BRICS initiatives, Bitcoin's adoption is rising, with significant investments from firms like BlackRock and MicroStrategy. As Bitcoin's value fluctuates, countries moving away from the dollar face potential tariffs, complicating the landscape for BRICS and cryptocurrency.
U.S. stock futures showed little movement following the S&P 500 and Nasdaq Composite's third consecutive winning week, with the Dow Jones Industrial Average futures down 15 points. The market anticipates a potential interest rate cut by the Federal Reserve at its December 18 meeting, supported by a strong November jobs report. Key inflation data is set to be released this week, with expectations of a slight increase in consumer prices.
U.S. markets surged post-election, with the S&P 500 closing above 6,000 and the Dow surpassing 44,000 for the first time. Bitcoin also hit a record high of $88,684, while analysts caution that the rally may be overextended, urging investors to remain prudent and diversified amid uncertainty.
Treasury yields rose as investors awaited the results of the tight presidential race between Vice President Kamala Harris and former President Donald Trump. The 10-year yield increased to 4.6%, with expectations that a Trump victory could push yields higher due to potential tax cuts and increased spending, while a Harris win might see yields retreat toward 4%. A split Congress is viewed as favorable for markets, potentially limiting drastic fiscal changes.
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