Overnight U.S. Stocks | Where Did the Christmas Rally Go? This Week, the Three Major Indices, Crude Oil, and Gold All Declined

According to Zhitong Finance, on Friday, the U.S. House of Representatives began voting on the latest stopgap government funding bill, striving to avoid a repeat of the U.S. government shutdown crisis. This week, all three major stock indices recorded declines. The Dow Jones fell 2.25% over the week, the Nasdaq closed down 1.78%, and the S&P 500 index dropped 1.99%.

【U.S. Stocks】 As of Friday's close, the Dow Jones rose 498.02 points, an increase of 1.18%, closing at 42,840.26 points; the Nasdaq rose 199.83 points, an increase of 1.03%, closing at 19,572.60 points; the S&P 500 index rose 63.77 points, an increase of 1.09%, closing at 5,930.85 points. Tesla (TSLA.US) fell 3.46%, NVIDIA (NVDA.US) rose 3.08%, Apple (AAPL.US) rose 1.88%, and Broadcom (AVGO.US) rose 1.13%.

【European Stocks】 The German DAX 30 index fell 108.00 points, a decrease of 0.54%, closing at 19,891.47 points; the UK FTSE 100 index fell 24.84 points, a decrease of 0.31%, closing at 8,080.48 points; the French CAC 40 index fell 19.89 points, a decrease of 0.27%, closing at 7,274.48 points; the Euro Stoxx 50 index fell 18.45 points, a decrease of 0.38%, closing at 4,860.55 points; the Spanish IBEX 35 index rose 22.60 points, an increase of 0.20%, closing at 11,462.50 points; the Italian FTSE MIB index fell 40.00 points, a decrease of 0.12%, closing at 33,747.00 points.

【Asia-Pacific Stock Markets】 The Nikkei 225 index fell 0.29%, the Jakarta Composite Index in Indonesia rose 0.1%, and the KOSPI index in South Korea fell 1.3%.

【Cryptocurrency】 Bitcoin once fell 5%, with the decline from this week's historical high expanding to nearly 15%. As of the time of writing, the cryptocurrency rebounded to a slight drop, priced at $97,498.62.

【Gold】 Spot gold rose 1.11%, priced at $2,622.91 per ounce, with a cumulative decline of 0.96% this week; COMEX gold futures rose 1.25%, priced at $2,640.80 per ounce, with a cumulative decline of 1.32% this week.

【Crude Oil】 Crude oil fell this week as investors assessed the Federal Reserve's plan to slow down interest rate cuts, and President Trump threatened the European Union with tariffs if they did not purchase more U.S. oil and gas. Trump stated that he hopes the EU will make large-scale purchases of U.S. oil and natural gas and threatened to impose tariffs on the EU if they do not comply. As the U.S. government faces a potential shutdown due to funding issues, this has intensified economic concerns. The Federal Reserve lowered its forecast for the number of interest rate cuts next year on Wednesday, reflecting a more hawkish stance on inflation. Nevertheless, Bart Melek, global head of commodity strategy at TD Securities, stated that the central bank's signal to reduce the number of interest rate cuts next year is not a very positive dynamic for risk assets, including oil. Crude oil prices have been in a range-bound state since mid-October, with the annual trading range heading towards the narrowest since 2019 [Metals] LME copper futures rose by $58, closing at $8,941 per ton. LME aluminum futures increased by $28, closing at $2,534 per ton. LME zinc futures gained $4, closing at $2,972 per ton. LME lead futures rose by $8, closing at $1,980 per ton. LME nickel futures increased by $243, closing at $15,356 per ton. LME tin futures rose by $290, closing at $28,689 per ton. LME cobalt futures remained flat, closing at $24,300 per ton.

[Macroeconomic News]

U.S. consumer confidence rises for the fifth consecutive month; short-term inflation expectations slightly increase. The U.S. consumer confidence index for December rose for the fifth consecutive month, with short-term inflation expectations also slightly increasing. The final value of the University of Michigan's consumer confidence index for December rose from last month's 71.8 to 74. The median estimate from economists surveyed by Bloomberg was 74.2. Data released on Friday showed that consumers expect inflation to be 2.8% over the next year. They anticipate that the inflation rate will rise to 3% over the next five to ten years.

Citi: Inflation easing may lead to larger-than-expected Fed rate cuts. The Federal Reserve raised its target for the federal funds rate by 0.5 percentage points for the end of 2025. Citi economist Andrew Hollenhorst believes the Fed may find itself in a bind. With core PCE rising by 0.1% month-on-month in November, price increases are slowing, and the Fed's eventual rate cuts may exceed current expectations. "In our baseline assumption, a softening labor market will lead the Fed to cut rates at every meeting going forward." This view contrasts with market expectations that the Fed will pause rate cuts in January. "But even if we are wrong, a flat unemployment rate and slowing inflation are sufficient reasons to cut rates at every meeting beyond January."

Fed overnight reverse repos fall below $100 billion as policy adjustments drive fund outflows. Following the Fed's policy adjustments this week, the amount of funds held by investors in a key Fed tool has fallen below $100 billion for the first time since 2021. On Friday, about 40 counterparties deposited a total of $98.4 billion into the Fed's overnight reverse repurchase agreement (RRP). Banks, government-sponsored enterprises, and money market mutual funds can earn interest by using the RRP. According to data from the New York Fed, RRP usage has significantly decreased compared to the record $2.55 trillion on December 30, 2022. Fed officials lowered the RRP relative to the lower bound of the policy rate target range by 5 basis points on Wednesday to maintain stability in the U.S. funding markets. The federal funds rate target range was lowered to 4.25%-4.50%, with the new RRP rate set at 4.25%, marking the first time since 2021 that the RRP rate aligns with the lower bound of the policy rate target range.

Canadian Prime Minister Trudeau reshuffles cabinet to address dual domestic and international challenges. On December 20, Canadian Prime Minister Trudeau reshuffled his cabinet, with the swearing-in ceremony held at the Governor General's residence. It is understood that the new Minister of Public Safety is David McGuinty, the former chair of the Canadian National Security and Intelligence Committee. Another significant appointment is Anita Anand as the newly established Minister of Transportation and Domestic Trade This appointment indicates that the new cabinet intends to strengthen the development of domestic trade in the face of Trump's tariff threats. In addition, there are several personnel adjustments.

【Individual Stock News】

Volkswagen (VWAGY.US) and the union agree to cut production capacity while maintaining normal operations at German plants. Volkswagen Group has reached an agreement with union leaders to cut production capacity for its namesake brand while avoiding plant closures, ending three months of tense negotiations and preventing further union strikes. The Volkswagen union stated on Friday that Volkswagen agreed to keep its 10 plants in Germany operational and to restore job security agreements until 2030. In exchange, workers agreed to forgo some bonuses, reduce the number of interns eligible for permanent employment, and cut production capacity at five plants by hundreds of thousands of units. These measures were finalized after five rounds of negotiations and are far from Volkswagen's initial proposal for significant cuts. Union leaders strongly opposed plans to lay off thousands of workers, reduce monthly salaries, and close three German plants to enhance the competitiveness of the Volkswagen brand.

SkyBridge Capital founder and managing partner: Concerns about MicroStrategy (MSTR.US) debt are exaggerated. Anthony Scaramucci, founder and managing partner of hedge fund SkyBridge Capital, stated that all concerns regarding MicroStrategy's large purchases of Bitcoin and its debt are exaggerated. Scaramucci said in an interview on Friday, "People think that if Bitcoin crashes, it will crash, and as a result, the leverage in the system will decrease, leading to a collapse." He added, "But if you seriously study its balance sheet, you will find that there is long-term debt and also rolling long-term debt. Unless Bitcoin collapses systemically, and this situation lasts for six or seven years, it will be out."

Trump transfers his shares in Trump Media (DJT.US) to a revocable trust. President-elect Trump has transferred his shares in Trump Media & Technology Group to a revocable trust. Securities filings show that Trump transferred 114.75 million shares, or 53% of the outstanding shares of Trump Media & Technology Group, to the revocable trust, of which he is the sole beneficiary. Based on the company's last closing price of $35.41 per share, the value of his holdings exceeds $4 billion. Trump stated in November that he had no intention of selling his shares in the company, which owns the Truth social media platform. Securities filings indicate that Trump's eldest son, Donald Trump Jr., is the sole trustee of the trust, holding exclusive voting and investment rights over the securities