Despite a December wobble, US equities rounded off another impressive year last week, the S&P500 recording its second straight annual gain of more than +20.0% in 2024 (in US dollar terms). That marked the best two year stint for the index for 25 years whilst the NASDAQ finished the year up over +20.0% for a sixth time in the last eight years[1]. Focussing on last week specifically, the S&P500 slipped by -0.5% in what was a holiday shortened week due to the New Year celebrations. Declines amongst some of the index’s most significant constituents, notably Apple and Tesla was also a headwind, the latter weakening on lower-than-estimated deliveries during the fourth quarter[2].

Moving to Europe, the MSCI Europe ex index was flat in local currency terms, reflective of low trading volumes and news flow. In the UK, the FTSE 100 and FTSE 250 gained by +0.9% and +0.5% respectively, with the former benefitting from a bout of weakness in the pound relative to the US dollar given the magnitude of overseas earnings in the index. Significant retracement was seen in Chinese equities with the Shanghai Composite slumping by 5.6% (local currency). Below forecast manufacturing activity as per the official and Caixin Purchasing Manager Index (PMI) figures was a leading influence over the direction of travel last week. Japanese equities also lost ground, the Nikkei 225 shedding – 1.0% (in yen) although that wasn’t enough to prevent the index from recording its best ever year-end closing level. There was no obvious catalyst for last week’s decline with profit taking a possible driver.

Concluding with commodities, oil prices rallied on the back of particularly cold weather in Europe and the US as well as stimulus fuelled demand optimism relating to China. Brent Crude rose by +3.1% to end the trading week at $76.35 a barrel. Gold prices also advanced with the precious metal climbing to $2,643 an ounce (+1.0%) despite the strength in the dollar; typically, the dollar and gold move inversely to one another given a lower dollar makes it cheaper for buyers in other currencies. Gold was another member of the +20.0% club last year with the metal’s safe haven status a key driver amid significant global geopolitical tensions and an uncertain economic outlook.

Week Ahead

Source: Workspace DataStream, 06/01/25
 

[1] T. Rowe Price – Global Markets Weekly Update 03/01/2025

[2] Tesla – Q4 2004 Production, Deliveries & Deployments 02/01/2025

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