Global Market Quick Take: Asia – January 3, 2024 Global Market Quick Take: Asia – January 3, 2024 Global Market Quick Take: Asia – January 3, 2024

Global Market Quick Take: Asia – January 3, 2024

Macro 5 minutes to read
Redmond Wong

Chief China Strategist

Summary:  On the first trading day of 2024, the Nasdaq 100 plummeted 1.7% due to profit-taking, higher Treasury yields, an Apple downgrade, and cautious notes on Nvidia. Treasury yields surged as traders reassessed anticipated Fed rate cuts and ongoing quantitative tightening, impacting liquidity. The 10-year yield rose to 3.93%. The dollar strengthened against major currencies, pushing USDJPY to 142.00. WTI and Brent crude oil both fell by 1.8% and 1.2%, respectively, influenced by the dollar's rally.


The Saxo Quick Take is a short, distilled opinion on financial markets with references to key news and events. 

US Equities: Profit taking, higher Treasury yields, an analyst downgrade of Apple, and a cautious analyst note on Nvidia saw the Nasdaq 100 plunge 1.7% to finish the first trading day of 2024 at 16,544. The S&P 500 dropped by 0.6% to 4,743. An analyst report from a global investment bank downgraded Apple to underweight from equal weight. The bank also lowered the price target to $160 from $161, below the current market, attributing it to findings from the analysts’ channel check that show softness on volumes and product mix. Apple’s shares fell 3.6%. Nvidia dropped by 2.7% after a US investment bank cautioned investors about the disillusionment of the "AI hype" and assigned a below-market $410 price target to the AI chip maker. Meanwhile, Moderna surged 13.1% on an analyst upgrade and upbeat comments on 2025 sales growth from the drugmaker’s CEO.

Fixed income: Treasury yields surged across the curve as traders reassessed the anticipated amount of Fed rate cuts and considered the potential impact on liquidity due to ongoing quantitative tightening and the decline in reverse repo balances at the Fed. The 2-year yield jumped by 7 bps to 4.32%, and the 10-year yield increased by 5 bps to 3.93%. Today's focus will be on the JOLTS job openings data, with attention then shifting to the job report scheduled for release on Friday.

China/HK Equities: The Hang Seng Index and the CSI300 plummeted 1.5% and 1.3% respectively as investors returned from the New Year holiday. This reaction came in response to China's official NBS PMI data released over the weekend, which indicated that both the manufacturing and service sectors in the country remain in contraction. Despite the private Caixin China manufacturing PMI showing a slight increase from 50.7 in November to 50.8 in December, this did not alleviate the prevailing pessimism among investors. Chinese developer stocks declined as sales of the top 35 listed developers dropping by 46% Y/Y or showing a marginal 1% M/M increase in December. Macao casino stocks defied the overall market weakness and gained amid strong gross gaming revenue growth in late December.

FX: The dollar rallied against major currencies as Treasury yields rose, resulting in the DXY gaining 0.9%. USDJPY rebounded by 0.8% to 142.00. EURUSD dropped by 0.9% to 1.0942, and AUDUSD slid 0.8% to 0.6761. Traders are unwinding some of their dollar shorts ahead of key US labor market statistics this week, particularly the non-farm payrolls and unemployment rate to be released this Friday.

Commodities: Crude oil initially gained on tensions in the Red Sea during the first trading session of the year but later retreated to close lower. WTI crude and Brent crude oil both fell, declining by 1.8% and 1.2%, respectively, dragged down by a rally in the dollar.

Macro:

  • The final reading of the US S&P manufacturing PMI came in at 47.9%, down from the previously reported flash reading of 48.2.
  • The private survey of Caixin China manufacturing PMI picked up to 50.8 in December from 50.7 in November, better than 50.3 expected.
  • The People’s Bank of China injected RMB350 billion low-cost funds to targeted projects in the economy in December via policy banks through its Pledged Supplemental Lending programme.

Macro events:  US ISM manufacturing (Dec), US JOLTS job openings (Nov), US Wards total vehicle sales (Dec), US FOMC minutes (Dec), Germany unemployment change (Dec), Japan markets are  closed for holiday.

In the news:

  • China’s BYD overtakes Tesla as world’s largest maker of pure-electric vehicles on fourth-quarter EV sales surge (SCMP)
  • China removed an official at a government body overseeing its press and publications regulator, days after Chinese gaming stocks were hit by proposed rules to curb spending on video games (Reuters)
  • EV maker Rivian's quarterly deliveries miss expectations, shares tank (Reuters)
  • OPEC+ Plans Oil Market Monitoring Meeting in Early February After Fresh Output Cuts Start (Bloomberg)

For all macro, earnings, and dividend events check Saxo’s calendar.

For a global look at markets – go to Inspiration.


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.