Measuring all key global developments across the world, the stage seems set for a central bank pivot, with monetary policy easing slated soon, according to investors. Bitcoin surges past the $45,000 level as the crypto regains its shine. Tech behemoths Apple and X face heightened scrutiny from investors. All this and more on the January 3 edition of World Street.
Brave New World
Investors appear convinced that major Western central banks are close to a much-awaited pivot from raising interest rates to cutting them. Markets rallied as a result, but 2024 could hold surprises as the world adjusts to an economic order where money is not cheap, reports Reuters. Global stocks rallied and top government bond yields fell in recent weeks, despite central bankers cautioning against pivot bets. In the US, for example, investors are effectively positioned for the Federal Reserve guiding the economy to a perfect landing, bringing down inflation without triggering a recession.
Game On
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. Feng Shixin was removed last week from his position as head of the publishing unit of the Communist Party's Publicity Department, as per a report. The department oversees the National Press and Publication Administration (NPPA) which in turn regulates China's vast video games sector.
Crypto Capers
Bitcoin surged above $45,000 on Tuesday for the first time since April 2022 as the world's biggest cryptocurrency started 2024 with a bang buoyed by optimism around possible approval of exchange-traded spot bitcoin funds. Bitcoin touched a 21-month peak of $45,488, having gained 154 percent last year in the strongest performance since 2020. It was last up 2.6 percent at $45,344 but remains far off the record high of $69,000 it touched in November 2021.
Macro Matters
Euro Zone factories ended 2023 on the back foot, with activity contracting in December for the 18th straight month, according to a survey which gave scant signs of any imminent strong rebound in an economy likely in recession. HCOB's final Euro Zone manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, did nudge up to 44.4 in December from November's 44.2 but remained firmly below the 50 mark separating growth in activity from contraction.
Rising Debt
The US Federal government's debt crossed the $34 trillion mark for the first time ever, reported the Treasury Department. The total outstanding public debt rose to $34.001 trillion. The $33 trillion mark was crossed in September 2023, with rising debt fueled by falling tax revenues and rising expenditures, per Reuters.
Missed Call?
After Barclays downgraded the global behemoth, Apple shares fell 4 percent in trade on January 2. The iPhone 15’s lacklustre sales and weak projections for iPhone 16 sales figures made analysts lose confidence in the firm. The lack of bounce-back in Macs, iPads and wearables also contributed to the negative sentiment.
Reduced X-pectations
Shares of Elon Musk-led X might be worth 71.5 percent less than what the Tesla chief paid for it, according to a securities filing by investment giant Fidelity. The firm has steadily reduced the estimated value of X’s shares as the social media platform faces successive crises driven by Musk, Fidelity said.
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