Bitcoin hits $100,000

General market commentary

The US equities market continued its upward momentum on Wednesday, with major indices hitting fresh record highs, largely driven by a surge in technology shares. The S&P 500 rose 0.61%, the Dow Jones climbed 0.69%, and the Nasdaq gained 1.30%, led by mega-cap tech giants like Apple, Meta, and Amazon. The rally in tech equities was fuelled by strong earnings from Salesforce and optimistic prospects for AI-driven growth, particularly in semiconductors. While the broader market showed signs of churn, with more sectors losing ground than gaining, the "melt-up" in equities was predominantly led by the tech sector, with defensive sectors such as utilities and real estate seeing a dip despite falling Treasury yields.

Investors also digested mixed economic data, with softer-than-expected readings in the ISM Services PMI and ADP employment report, though optimism remained about future economic growth. Federal Reserve Chairman Jerome Powell's cautious remarks, signalling no rush to cut rates, did little to dampen investor sentiment, as Treasury yields fell and equities continued their ascent. Futures markets are pricing in a 75% probability of a 25-basis-point rate cut at the Fed's December meeting, with further cuts expected in 2025, despite Powell's suggestion that the economy remains stronger than anticipated. The focus will shift to Friday's nonfarm payrolls report, which could provide further clues on the strength of the labour market.

Meanwhile, French lawmakers passed a no-confidence vote against Prime Minister Michel Barnier, plunging the country into a political crisis and leaving its government in turmoil. This deepens uncertainty over France's ability to pass crucial legislation, including the 2025 budget, and could further destabilise the European Union.

Latest market update

• Most Asian equities rose on Thursday, buoyed by a tech rally, with Japan's Nikkei and Australia's ASX 200 both gaining. However, South Korean shares continued to fall due to political instability, while broader market sentiment remained cautious amid ongoing geopolitical risks and concerns over the impact of US trade policies.

• US equity futures were little changed on Wednesday evening, with S&P 500 Futures slightly lower and Nasdaq 100 Futures down 0.1%.

• The Euro STOXX 50 rose 0.8% on Wednesday, driven by gains in SAP, which climbed over 4%, and Schneider Electric, up more than 2%. The positive performance came despite political uncertainty in France, where a no-confidence vote loomed over Prime Minister Barnier's government, adding to the market's cautious sentiment.

• The US dollar remained strong on Thursday, with the dollar index at 106.27, as traders focused on the prospect of a Federal Reserve rate cut despite mixed economic data. Meanwhile, the euro struggled, trading near a two-year low of $1.052, weighed down by political uncertainty in France following the collapse of its government.

• The yield on the US 10-year Treasury

• Oil prices rose slightly on Thursday, supported by a larger-than-expected draw in U.S. inventories and rising geopolitical tensions in the Middle East, though gains were limited by builds in product inventories and anticipation of an OPEC+ meeting. Traders are awaiting the outcome of the OPEC+ meeting, which is expected to extend production cuts amidst concerns over slowing demand, particularly from China.

• Bitcoin surged to a record high of $101,438 on Thursday, driven by optimism over pro-crypto regulations under President-elect Donald Trump and his appointment of Paul Atkins to lead the SEC. The cryptocurrency also gained support from Jerome Powell’s comparison of Bitcoin to gold, boosting its appeal as a speculative asset.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

• Apple and Baidu are working to integrate AI features into iPhones sold in China but are facing challenges with the accuracy of Baidu’s large language models and data privacy issues. These hurdles come as iPhone sales in China stagnate, while rival Huawei sees a significant sales surge, highlighting intensifying competition in the market.

• Eli Lilly's Zepbound obesity drug outperformed Novo Nordisk's Wegovy in a head-to-head trial, showing 20.2% weight loss compared to 13.7%. Zepbound's dual action mechanism also delivered significant weight loss with a safety profile similar to earlier studies.

• Foot Locker shares dropped over 9% in Thursday's session after the company cut its annual earnings and sales forecast, citing weaker consumer spending and a more competitive promotional environment. The footwear retailer also missed analyst expectations for Q3 earnings, revenue, and comparable sales growth.

• Roku shares rose 9.6% yesterday after Needham & Company maintained a Buy rating and $100 price target, citing the company as a prime acquisition target. The analysts highlighted Roku's large user base, valuable data, and strong positioning in the connected TV market as key factors that could attract potential buyers.

• Jefferies raised its price target for Salesforce to $425, citing strong third-quarter results, but noted concerns over slower profit margin improvements and weaker growth in acquired businesses. Despite these issues, the firm remains confident in Salesforce's long-term growth prospects, maintaining a "Buy" rating.

• Wolfe Research initiated coverage of GE Vernova with an Outperform rating and a $403 price target for year-end 2025, citing strong growth potential driven by electrification trends and the company's leadership in power equipment. Despite its high valuation, analysts expect significant upside, with potential for margin expansion and capital returns as the company ramps up earnings in the coming years.

• Country Garden's sales plunged by 52.3% in November, exacerbating liquidity concerns as the Chinese property market continues to struggle despite government measures. The company, which has seen a sharper decline in sales than its competitors, is also facing mounting financial difficulties, including delayed debt restructuring negotiations.

Upcoming data and events

The market attention today will be on the U.S. initial jobless claims report and the OPEC meeting, which could impact labour market trends and global oil prices. Other key data include trade balance and continuing jobless claims.

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