Global Economic Daily - 1/7/2025
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Quote of the Day: There is little that can withstand a man who can conquer himself. – Louis XIV
Equities: Stocks were mixed but overall up, heavily carried by the tech industry to start the week. The?S&P 500?climbed alongside the Nasdaq Composite on Monday for back-to-back wins, as Wall Street rebounded from a losing week and chipmakers surged. The broad market index advanced 32.91 points to end at 5,975.38, and the?Nasdaq 100?added 233.34 points to 21,559.50. The?Dow Jones Industrial Average?lagged losing 25.57 points and closing at 42,706.56. Earlier in the session, the 30-stock average rose as much as 383 points. Market sentiment on Monday was also boosted by a Washington Post report saying President-elect Donald Trump’s tariff plan?would be narrower than anticipated, covering only critical imports. Trump called for “universal” tariffs as high as 10%-20% during his campaign.?Ford?and?General Motors?shares gained less than 1% and more than 3%, respectively, on optimism that a more restrained tariff policy from Trump wouldn’t spark a global trade war. Investors began?another shortened trading week?with lingering concerns about the Federal Reserve’s interest rate projections. The New York Stock Exchange will be closed Thursday to mourn the death of former President Jimmy Carter. Elsewhere, the 10-year Treasury yield rose to top 4.6% ahead of important economic reports out later this week. The December jobs report is due out Friday and will be one of the last key pieces of data before the Fed meeting near the end of this month. Investors are also watching the Job Openings?and Labor Turnover Survey, or JOLTS, on Tuesday and December ADP Employment Survey on Wednesday. TECHNICAL OUTLOOK – The Dow and S&P are now both below the 14, 21 day moving average.
Metals: Gold prices are a bit weaker but well up from earlier sharp losses in midday U.S. trading Monday. Silver prices are solidly up and hit a three-week high. Rising U.S. Treasury yields that are at their highest levels since last May are a bearish outside-market element for the two metals to start the trading week. The U.S. dollar index is sharply down today on worries about the bulging U.S. government debt load. Bloomberg reported the uptick in bond yields only adds further pressure to U.S. government debt. There are concerns the incoming Trump administration will reignite inflation. There’s $119 billion of U.S. government debt issuance this week, amid growing concern Republican-controlled Congress will push up spending and increase the U.S. budget deficit. The USDX quickly but only briefly shot up from its daily low on news President-elect Trump denied that he will go easier on new trade tariffs. Trump refuted a Washington Post story that quoted Trump aides as saying the new president may be more selective on new tariffs. The U.S. data point of the week is the employment situation report for December on Friday. It’s forecast to show non-payrolls increasing by 160,000. That compares to a gain of 227,000 in the November jobs report. The key outside markets today see the U.S. dollar index sharply lower on corrective pullback after hitting a more-than-two-year high last week. Nymex crude oil futures prices are slightly up and trading around $74.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is on the rise and is presently arounds 4.6%--the highest level since 2023. Technically, February gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. March silver futures bears have the slight overall near-term technical advantage. However, a nine-week-old downtrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at $32.00. The next downside price objective for the bears is closing prices below solid support at the December low of $29.145. TECHNICAL OUTLOOK – Gold is above the 14, 21 day moving average, while silver remains below.
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