Stocks drop as investors trim risk before year-end: Markets wrap
Written by Black Hot Fire Network on December 30, 2024
(Bloomberg) — European stocks posted modest declines, tracking weakness in Asian markets as some investors trimmed positions amid uncertainty heading into year-end.
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The Stoxx 600 index dropped 0.4%, with volumes relatively thin due to the holiday season. US futures slipped, adding to Friday’s retreat on Wall Street marked by a pullback in the “Magnificent Seven” tech megacaps that have powered this year’s rally. Asian stocks snapped five days of gains.
“In these moments, it’s best to stay put,” said Nicolas Domont, a fund manager at Optigestion in Paris. “The US remains the place to be. Growth stocks continue to outperform and earnings forecasts are good, so there are good reasons to remain optimistic.”
Treasuries rose, with 10-year yields dropping from near the highest levels since May. German bonds erased an earlier advance after data showed Spanish inflation accelerated more than anticipated this month, supporting the case for gradual interest-rate cuts from the European Central Bank.
The Bloomberg Dollar Spot Index was steady after rising more than 7% in 2024, driven by the anticipation of “America First” policies from President-elect Donald Trump.
“There’s a little bit of trepidation heading into year-end, owing in part to uncertainty over how the international trade picture may take shape in 2025,” said Tim Waterer, chief market analyst at Kohle Capital Markets Pty. “Some traders are taking risk off the table heading into year-end.”
Trading in Europe’s equity benchmark was about 60% below the 20-day average. It’s the final session of 2024 for some markets including Germany, where the DAX benchmark is on course for a 19% annual advance, beating peers in the UK and France.
Back in Asia, shares in Jeju Air fell 8.7% in Seoul to a record low after a Boeing Co. 737-800 aircraft operated by the carrier crashed on Sunday, causing the death of all but two of the 181 occupants. Boeing dropped more than 4% in US premarket trading.
Investigators are focusing on a possible bird strike or landing-gear failure, and an analyst said it’s unlikely the events were related to Boeing’s production. Boeing said in a statement that it’s in contact with Jeju Air and ready to offer support.
Nissan Motor Co. shares retreated 5.7% in Tokyo on concern the terms of the carmaker’s planned deal with Honda Motor Co. would give investors a lower stake in the proposed joint holding company.
While Asian shares were mostly lower Monday, they are still heading for a successful year. The MSCI Asia Pacific gauge has advanced 7.6% in 2024 as central banks eased monetary policy and tech stocks rallied amid optimism over artificial intelligence.
