Wall Street is seen trading slightly lower Tuesday, the last trading day of what has been a positive year on Wall Street. China's manufacturing sector grew at a slower than expected pace in December, while Bitcoin and gold are set to close out the year with hefty gains.
1. China’s manufacturing sector grew in December
China’s manufacturing sector expanded in December but at a slower-than-expected pace, purchasing managers index data showed on Tuesday, marking its third straight month of expansion as a raft of fresh stimulus measures continue to provide support.
Manufacturing PMI was at 50.1 in December, data from the National Bureau of Statistics showed, above the 50 level indicates expansion, but below the 50.3 seen in the prior month.
Most major indexes that constitute the manufacturing PMI were above the critical point, the survey statement said, adding that the production activities of manufacturing enterprises maintained a rapid expansion.
China has committed to implementing more proactive fiscal stimulus measures and adopting moderately looser monetary policies in 2025, the government signaled during a Politburo.
Beijing is expected to roll out more targeted, fiscal stimulus in response to Trump’s tariffs in the coming year. Recent reports suggested that the country will ramp up fiscal spending to support economic growth.
Strong Chinese consumption extended beyond the manufacturing sector. Non-manufacturing PMI grew 52.2 in July, resulting in the country’s composite PMI expanding to 52.2 in December from 50.8 in the prior month.
China's gross domestic product is expected to grow by around 5% in 2024, President Xi Jinping said on Tuesday, state media reported.
2. Futures edge lower; Wall Street to record major gains in 2024
US stock futures edged marginally lower Tuesday, in thin trading ahead of the final trading session of 2024, a very positive year.
By 03:45 ET (08:45 GMT), the Dow futures contract was down 6 points, or 0.1%, S&P 500 futures dropped 5 points, or 0.1%, and Nasdaq 100 futures fell by 33 points, or 0.2%.
The major averages are set to close the year with strong gains, with the S&P 500 up around 24%, the Dow Jones Industrial Average gaining 13%, while the Nasdaq has gained around 30%.
The US stock markets have benefited this year from the Federal Reserve undergoing one of its most aggressive hiking cycles in recent history, spurring hopes for a period of economic growth.
President-elect Donald Trump’s successful reelection campaign in November also boosted market sentiment, fueling hopes of deregulation and lower corporate tax rates, although worries about future trade wars remain.
The economic data slate is largely empty Tuesday, and markets are closed on Wednesday, meaning the focus will quickly turn to weekly unemployment and ISM manufacturing PMI data later in the week, ahead of next week’s monthly official jobs report.
3. Bitcoin set for monthly fall
Bitcoin edged higher Tuesday amid soft year-end trading volumes, but the world’s most popular cryptocurrency was set for its first monthly fall since early August.
At 03:45 ET, Bitcoin rose 0.5% to $94,297.0, but was on course for weekly losses of over 4%, set for its third straight weekly fall, having fallen in five out of the last six sessions.
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That said, Bitcoin is set for an annual gain of around 120% after recording a record high above $100,000 in November after Donald Trump secured his return to the White House, boosting sentiment surrounding crypto with many analysts expecting him to promote a more favorable regulatory environment for digital assets.
Sentiment in the sector had also received a boost earlier in the year after the SEC gave the green light to the first US spot bitcoin exchange-traded funds, or ETFs, broadening crypto’s appeal to more mainstream investors.
The digital currency is widely expected to see more positive price momentum in 2025 — with several industry watchers predicting a doubling in value to $200,000.
4. Gold records stellar gains in 2024
Gold prices edged higher Tuesday, and were set for stellar yearly gains on the back of Federal Reserve’s interest rate cuts this year as well as geopolitical tensions and robust buying from the major central banks.
At 03:45 ET (08:45 GMT), spot gold rose 0.4% to $2,615.85 per ounce, while gold futures expiring in February edged 0.4% higher to $2,627.50 an ounce.
The yellow metal has risen more than 25% in 2024 due to the Fed’s outsized rate cuts earlier this year and geopolitical tensions around the globe.
While gold prices rose for most of the year, the Fed’s December meeting acted as a bump after it signaled fewer rate cuts in the upcoming year.
The market now awaits a fresh set of catalysts, including a slew of US economic data due next week that could influence the US central bank's interest rate outlook for 2025, and President-elect Donald Trump's tariff policies.
5. Oil rises on Chinese manufacturing growth
Crude prices rose Tuesday, boosted by signs of growth in Chinese manufacturing activity, but are on track to end lower for a second consecutive year due to demand concerns in top consuming countries.
By 03:45 ET, the US crude futures (WTI) climbed 0.8% to $71.53 a barrel, while the Brent contract rose 0.7% to $74.48 a barrel.
China’s manufacturing sector expanded in December but at a slower-than-expected pace, marking its third straight month of expansion as a raft of fresh stimulus measures provided support.
The outlook for oil demand largely hinges on the hope that China, the world's largest oil importer, can revive its economy, especially as there are concerns about a potential oversupply due to expected increases in production from non-OPEC countries.
The Brent benchmark is still on course for a loss of around 3% in 2024, while the WTI contract is largely unchanged over the course of the year.
