Capital Markets Insights | 6 Jan - 10 Jan

• The U.S. markets had a rough week, with the S&P 500 dropping nearly 3%, the Nasdaq declining by 2.4%, and the Dow Jones Industrial Average falling by 1.9%. The market was influenced by rising inflation concerns and a cautious outlook from the Federal Reserve on rate cuts, which spooked investors.

• Gold prices surged to new record levels, reaching $2,726.40 per ounce by week's end. This rise came despite robust U.S. employment data; instead, it was driven by central bank buying, gold's role as an inflation hedge, and demand from Chinese investors. The market sentiment for gold remains bullish as inflation concerns increase.

• WTI oil prices experienced significant volatility this week, ending on a high note. WTI crude oil reached new year-to-date highs, with prices increasing by over 2% on Friday alone, bringing WTI close to $78 per barrel. The surge was driven by colder weather boosting demand concerns, alongside expectations of tighter sanctions on Iranian and Russian oil exports, which supported the bullish sentiment.

• The cryptocurrency market was hit hard this week, with Bitcoin dropping to around $94,700 after peaking at $102,700 earlier in the week. This decline was triggered by strong U.S. economic data that diminished hopes for immediate Federal Reserve rate cuts. Coinbase Global (COIN) shares also fell 8%, reflecting the broader crypto market slump.

• Oh boy, buckle up for the Trump 2.0 Geopolitical Rollercoaster! The geopolitical landscape has been significantly influenced by President Donald Trump's latest announcements. There are reports of Trump threatening financial action against allies like Canada and Denmark over Greenland, which could signal a shift in U.S. international relations. Additionally, Trump's approach to immigration, Ukraine, Iran, and China is expected to shape U.S. foreign policy, potentially leading to increased global tensions or new diplomatic efforts.

• The U.S. Dollar Index (DXY) peaked at levels not seen since November 2022, hitting above 109, driven by higher bond yields. This surge made the dollar the week's winner in forex markets, impacting other currencies like JPY, Euro and British Pound negatively.

This Week's Top Gainer in US Markets (excluding small caps under $2B market cap)

• Company: NARI (Inari Medical Inc)

• Gain: 59.31%

• Company: RGTI (Rigetti Computing Inc)

• Gain: -53.05%

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