Pirmadienis, 26 vasario, 2024
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Apple’s Stock Crash: How It Affected the US Markets on the First Day of 2024

The US stock market started 2024 with a mixed performance, as different sectors reacted differently to the economic and geopolitical factors. The Nasdaq suffered a major blow, dragged down by a sharp decline in Apple’s stock after a negative rating from Barclays. The Dow Jones, on the other hand, edged higher, supported by defensive sectors like health care and utilities.

Market Overview

The Dow Jones Industrial Average (DJIA) added 25 points to 37,715. Posting a slight gain on the first trading day of the year. However, the S&P 500 slid 0.6%, ending at 4,742, and the Nasdaq plunged 1.6% to 14,765. The main reason for the Nasdaq’s fall was a 3.6% drop in Apple’s stock. Which was downgraded to underweight by Barclays. The bank expressed doubts about the iPhone sales and the recovery of other products like Macs, iPads, and wearables.

Apple trading strategy
Apple trading strategy

Construction Spending

The US construction spending rose by 0.4% month-over-month in November 2023, reaching an annualized rate of $2,050.1 billion. The growth was driven by private spending, which increased by 0.7%, mainly due to a 1.1% rise in residential projects. However, public spending fell by 0.7%, offsetting some of the gains. Compared to a year ago, construction spending grew by 11.3% in November, showing a strong trend.

Manufacturing PMI and Economic Indicators

The US manufacturing sector contracted more than expected in December 2023. As the S&P Global US Manufacturing Purchasing Managers’ Index (PMI) dropped to 47.9, the lowest level since May 2020. The deterioration was caused by a decline in new orders. Which led firms to reduce their input purchases and employment levels. The cost pressures also increased, as input prices rose at a faster rate.

Lithium Market Dynamics

The lithium market witnessed a dramatic fall in prices, as lithium carbonate dropped below CNY 97,500 per tonne in January, the lowest level since 2019. The slump, which amounted to over 80% in the last 12 months, was the result of oversupply and weak demand for electric vehicles in China. The market is expected to remain in surplus, with a lithium deficit not expected until 2028.

Lithium carbonate price
Lithium carbonate price

Currency Movements

The US dollar index surged about 0.8% to 102.1 on the first trading day of 2024, recording the biggest daily increase since October. The dollar’s strength was influenced by the economic and monetary policy outlooks, as traders anticipated a rate cut by the Federal Reserve in March. In 2023, the dollar lost about 2.1%, marking its first annual decline since 2020.

The euro fell below $1.1 at the start of 2024, affected by the upcoming European inflation data and the prospects of a Fed rate cut. The Swiss franc also weakened to 0.85 per USD, after hitting a 12-year high, reflecting the diverging rate expectations for the Swiss National Bank and the Federal Reserve.

Swiss franc index
Swiss franc index

Cryptocurrency Performance

Bitcoin and Ether started 2024 on a high note, with Bitcoin soaring about 5% to above $45,800, the highest level since March 2022, and Ether gaining more than 3% to $2,400. The rally was fueled by hopes that a Bitcoin exchange-traded fund (ETF) linked to spot bitcoin will soon be approved by US regulators.

BTCUSD price
BTCUSD price

Conclusion

The US markets showed a mixed reaction to the various factors that shaped the first trading session of 2024. Investors are keeping a close eye on the economic indicators, currency movements, and the developments in the tech and cryptocurrency sectors, preparing for a dynamic year ahead.

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