2024 Kicks Off With Several Significant Market Moves

Happy New Year and welcome to 2024! Investors around the world have wasted no time getting back to work with a number of significant moves underway across world markets.

Equities are under pressure to start the year following a series of ominous Manufacturing PMI reports that started with a miss and a sharp downturn under 50 into contraction territory by the Chicago PMI report on Friday (46.9 vs street 51.9 and previous 55.8). Over the weekend China Manufacturing (49.0 vs street 49.5) and Non-Manufacturing PMI (50.4 vs street 50.5) also came in below expectations. PMI reports from Europe and the UK have been mixed relative to expectations, but consistently in the 42-46 range, which is indicative of a modest contraction. S&P Global Manufacturing PMI reports for Canada (previous 47.7) and the US (street 48.2) are due at 9:30 am and 9:45 am EST respectively today, followed by US Construction Spending (street 0.5%) at 10:00 am.

Most major world indices are down today on this news including declines of 1.5% for the Hang Seng, 0.2% for the Nikkei, and 0.4% for both the Dax and the FTSE. US index futures are down 0.5% to 1.0%, adding to Friday’s declines of 0.1% to 0.6%.

One notable exception to the global slide has been the resource-weighted Australian market, which is 0.5%. This move appears to be powered by resource sectors which could potentially bode well for Canada today. Increasing political tensions in the Middle East has lit a fire under Crude Oil, which is up 1.9%, while Natural Gas is up 5.4% amid forecasts calling for falling temperatures and winter storms. In metals action, Copper is down 0.3%, while Gold is up 0.2%.

The US 10-year treasury note yield continues to bounce back, climbing toward 3.95% this morning. This has sparked a rally in the US Dollar, which is up 0.4% against the Canadian and Australian Dollars, 0.6% against the Pound and 0.8% against the Euro. Undaunted by this, cryptocurrencies are soaring to start the year with Bitcoin up 3.7% and Ethereum up 2.0%.

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