The Dow hits another all-time high, the Nasdaq turns down, Chinese concept stocks rise, offshore RMB rises more than 500 points intraday, and crude oil rebounds from the Red Sea crisis.

Whether it was the unexpectedly strong rebound in initial jobless claims in the US last week or the record-low pending home sales index in November, the data released on Thursday did not significantly affect the overall trend of the US stock market. However, with some indicators showing an overbought environment, the year-end Santa Claus rally faces challenges. The Dow Jones Industrial Average hit another record high, the SPDR S&P 500 continued to approach its historical high, while the Nasdaq turned lower during the trading session.

Chinese stocks outperformed the broader market, following the rally in A-shares with heavy trading volume. Chinese tech giants such as XPeng and NetEase rebounded strongly after a pullback on Wednesday. On the news front, the Supreme People's Procuratorate and the National Social Security Fund made significant announcements. The Supreme People's Procuratorate released a draft opinion to ensure the high-quality development of the financial sector, while the National Social Security Fund proposed enriching its investment toolbox by expanding investment scope and breadth, creating conditions for preserving and increasing the value of the fund. The fourth-quarter meeting of the Monetary Policy Committee of the People's Bank of China proposed increasing the implementation of the already introduced monetary policies, treating different types of real estate companies equally to meet their reasonable financing needs.

With less than one trading day left in 2023, major US stock indices are poised to end the year with double-digit gains, rising by at least 10%. The AI boom and market expectations of a dovish stance from the Federal Reserve have been the two main drivers of the rally. The Nasdaq 100 is expected to have a cumulative gain of over 50%, marking its best annual performance since the dot-com bubble in 1999.

Some commentators have suggested that if the US stock market can break through historical highs in January, it would be very bullish from a technical perspective. As many people adjust their investment plans at the beginning of the year, a strong rally in the stock market often intensifies the upward momentum. Others have commented that the seven major tech stocks, such as Nvidia and Microsoft, driven by the AI frenzy, have contributed to over 60% of the gains in the SPDR S&P 500. The key question is how much positive expectations are already priced into the stock prices, especially as the expectation of a soft landing continues to strengthen.

In the bond market, prices of European and US government bonds fell, with US 7-year Treasury yields rising further after the announcement of weak results from the auction. The yield on the benchmark 10-year German bond rose from a one-year low, while the yield on the benchmark 10-year US Treasury rose back above 3.80%, no longer approaching the five-month low set on Wednesday. The yield on the two-year US Treasury, which is sensitive to interest rates, rebounded from a seven-month low, reversing the significant decline seen throughout the month.

In the foreign exchange market, Chinese assets experienced a major surge, with the renminbi shining. Offshore renminbi rose more than 500 points during the trading session, approaching the 7.10 level for the first time since mid-December. Bank of Japan Governor Haruhiko Kuroda hinted at a rate hike in January, marking the first rate hike since 2007. The yen accelerated its rise, gaining over 1% during the trading session and reaching its highest level since the end of July. Under the pressure of a strong yen, the US dollar index continued to hit a five-month low during intraday trading, although it rebounded later. It is expected to accumulate a decline of over 2% this year, marking the worst annual performance since the outbreak of the COVID-19 pandemic. The continuous rise in the US dollar, along with the rebound in US bond yields, has jointly suppressed the upward momentum of gold prices. Gold futures fell from their historical highs at the close, while spot gold fell after reaching a three-week high. As more shipping companies prepare to resume transportation through the Red Sea, the crisis in Red Sea shipping continues to ease. International crude oil prices have accelerated their decline, with intraday drops exceeding 3%. According to media reports on Thursday, almost all of Maersk's container ships sailing between Europe and Asia will pass through the Suez Canal, with only a few vessels diverting to sail around Africa.

The US Department of Energy announced during intraday trading that US EIA crude oil inventories last week decreased by more than 7 million barrels, the largest weekly decline in three months, while the inventories at the main delivery location of US oil, Cushing, increased to a three-month high. The data did not provide consistent demand signals. After the release of the EIA data, crude oil futures fell further, and US oil gave up its gains since Maersk halted Red Sea shipping in mid-December. Some analysts believe that the increase in inventories at Cushing and the warm winter weather have both suppressed oil prices.

The SPDR S&P 500 continued to approach its historical high, while the Nasdaq stopped its four-day rally. Energy stocks and Tesla dragged down the overall market, while Chinese concept stocks outperformed the market for the second time this week.

The three major US stock indexes opened higher and maintained their gains for most of the day. When the market opened, the Nasdaq Composite Index rose by more than 0.3%, and the SPDR S&P 500 Index rose by more than 0.2%. However, they fell back in the late trading session, with the SPDR S&P 500 giving up most of its gains and the Nasdaq turning negative. The Dow Jones Industrial Average rose above 37,700 points for the first time during intraday trading, hitting a new intraday high for two consecutive days. It rose by more than 120 points when it reached its daily high at noon, but gave back more than half of its gains by the end of the day.

The SPDR S&P 500 Index came close to its historical intraday high in early trading, but almost erased its gains by the end of the day.

In the end, the three major indexes failed to close higher for three consecutive days. The Nasdaq, which had risen for four consecutive days, fell by 0.03% to 15,095.14 points, stabilizing at the closing high since January 12 last year, which was set for two consecutive days on Wednesday. The SPDR S&P 500 closed slightly higher by 0.04% at 4,783.35 points, barely maintaining its four-day winning streak and continuing to approach the closing high set on January 3 last year. The Dow Jones Industrial Average rose by 53.58 points, or 0.14%, to 37,710.10 points, marking a three-day rally and setting a new closing high for the second consecutive day and the sixth day of December.

In this week, which includes the Christmas holiday on Monday, the three major indexes are expected to rise for the ninth consecutive week. The SPDR S&P 500 is set to achieve its longest weekly winning streak since January 2004. In 2023, the Dow Jones Industrial Average and the SPDR S&P 500 are expected to rise by more than 10% and 20% respectively, while the Nasdaq is expected to rise by more than 40%. SPDR S&P 500 is expected to rise for the ninth consecutive week, marking the longest winning streak in nearly 20 years.

The small-cap Russell 2000, which is dominated by value stocks, fell 0.38%, deviating from the three-day winning streak and the closing high since April last year. The tech-heavy Nasdaq 100 index fell 0.05%, ending its four-day winning streak but still close to the record high set on Wednesday. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 index, rose 0.05%, rebounding from a slight decline on Wednesday and reaching a new closing high set on Tuesday.

In the major US stock indices, only three sectors in the SPDR S&P 500 closed lower on Thursday. The energy sector, affected by the sharp drop in oil prices, fell nearly 1.5%, while the materials sector, affected by the decline in metals, fell nearly 0.5%. Non-essential consumer goods, including Tesla, fell more than 0.4%. Among the eight sectors that rose, utilities led the way with a 0.7% increase, followed by real estate with a gain of over 0.5%. Essential consumer goods and communication services rose less than 0.1%, while the industrial sector saw a slight increase.

Among the leading tech stocks, Tesla performed the worst, opening high but closing down approximately 3.2%. This marks the largest decline since December 20th and ends the two-day winning streak that started on Wednesday, which reached a closing high since October 11th.

In the FAANMG group of six major tech stocks, Microsoft, which rebounded after falling due to a copyright infringement lawsuit filed by The New York Times on Wednesday, rose more than 0.3% to a high since November 30th. Meta, the parent company of Facebook, rose more than 0.1%, marking a three-day winning streak and a new closing high. Apple, which announced the resumption of selling smartwatches in the US after the US Court of Appeals lifted the ban on some smartwatches, rose more than 0.2%, continuing to recover from the low point since December 6th, which was set during a four-day decline. Amazon rose slightly by 0.03%, but has yet to approach the closing high set last Thursday. Netflix, which had risen for two consecutive days to a high since December 19th, fell nearly 0.3%. Alphabet, the parent company of Google, fell 0.1%, continuing to deviate from the high since March last year set on Tuesday. The overall chip stocks failed to maintain their upward momentum, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both falling by over 0.1% and nearly 0.2% respectively. This came after four consecutive days of gains and two consecutive days of setting new closing highs. At the close, AMD fell by over 1%, KLA Corp fell by nearly 0.9%, Micron Technology fell by nearly 0.8%, Intel fell by 0.7%, Broadcom fell by 0.3%, while Arm rose by over 4%, reaching a new high since its listing in September. AMD had previously risen by over 2%, Nvidia rose by 0.2%, and Qualcomm rose by 0.1%.

Including Apple, Microsoft, Google's parent company, Amazon, Nvidia, and Tesla, the seven major tech stocks overall gave back most of their gains in the late trading session on Thursday. However, they have already risen by over 20% this year, roughly double the increase of the SPDR S&P 500.

AI concept stocks generally rose, outperforming the broader market. At the close, BigBear.ai (BBAI) rose by about 10%, SoundHound.ai (SOUN) rose by over 4%, C3.ai (AI) rose by 0.6%, Palantir (PLTR) rose by 0.5%, while Adobe (ADBE) fell by nearly 0.1%, but still has a cumulative increase of over 70% this year.

Popular Chinese concept stocks generally rose, outperforming the broader market for the second day this week after Tuesday. The Nasdaq Golden Dragon China Index (HXC), which closed roughly flat on Wednesday, rose by over 3% in early trading, reaching a new closing high since November 28. The Chinese concept ETFs KWEB and CQQQ rose by 2.7% and 2.9% respectively. Gaming stocks, which fell on Wednesday, rebounded. NetEase, which fell by nearly 5% on Wednesday, rose by over 4% in early trading and closed up by 1.9%. Tencent, which fell by nearly 3% on Wednesday, rose by 2.1% in early trading. Bilibili, which fell by nearly 0.9% on Wednesday, rose by over 8% in early trading and closed up by 6.5%. The three new forces in the car-making industry all rose, with XPeng rising by over 8% at one point and closing up by 4.5%, while NIO and Li Auto both rose by over 4% at one point and closed up by over 3%. Among other individual stocks, DouYu, which announced a $20 million stock repurchase plan, rose by over 22%, JA Solar rose by over 5%, Huya rose by over 4%, Daqo New Energy and Dada rose by over 3%, Baidu rose by 3%, JD.com rose by 2.7%, Alibaba rose by over 1%, Pinduoduo rose by 0.6%, while Canaan, the bitcoin mining giant that rose by over 5% on Wednesday, fell by nearly 12%.

Among the more volatile stocks, Altice USA, the American subsidiary of French telecom and media giant Altice NV, rose by 20% in early trading and closed up by 6.6%. The company announced on Thursday that it will sell its financial news streaming media Cheddar News to media company Archetype. Coherus BioSciences (CHRS), a biopharmaceutical company, rose 20.5% after the FDA approved its Udenyca Onbody injection system for preventing infections in combination with chemotherapy. This marked the second consecutive day of over 20% gains for the company. On the other hand, Iovance Biotherapeutics (IOVA), a biotech company, rebounded strongly with an 18.8% increase in stock price after the FDA temporarily halted its clinical trial for LN-145, a treatment for non-small cell lung cancer. This recovery erased the nearly 19% decline from the previous day.

NeoGenomics (NEO), a cancer testing company, fell 18.1% after a preliminary injunction was issued by the court, prohibiting the manufacturing, use, sale, or distribution of its RaDaR technology in the United States. Marathon Digital (MARA), a cryptocurrency mining company, dropped 9.5% despite a 15% surge in Bitcoin. Grand Canyon Education (LOPE), an education services company, declined 6.4% following a lawsuit by the Federal Trade Commission (FTC) for deceptive illegal advertising and telemarketing practices.

In European markets, the pan-European Stoxx 600 index retreated after two consecutive trading days of gains. The index closed below the high reached on January 20th of last year. Major European stock indices declined on Thursday, with German, British, and Italian stocks falling after consecutive gains, Spanish stocks falling after three consecutive gains, and French stocks pulling back slightly after a minor rebound on Wednesday.

In terms of sectors, the oil and gas sector fell nearly 0.7% due to the decline in crude oil prices, while the banking sector dropped over 0.5%. However, the healthcare sector bucked the trend and rose over 0.5%, thanks to a 0.9% increase in Novo Nordisk, which had declined for two consecutive days. Among individual stocks, Maersk, the shipping giant that fell 4.7% on Wednesday, continued to decline, dropping over 1.7%.

German 10-year bond yield rises from one-year low, US bond yield rebounds, 2-year yield moves away from seven-month low

European bond prices overall declined, with yields following the acceleration of US bond yields. At the end of the bond market session, the yield on the UK 10-year benchmark government bond closed at 3.49%, up about 6 basis points during the day, bidding farewell to the low level of the past eight months. The yield on the 2-year UK bond closed at 3.96%, up about 3 basis points during the day, temporarily departing from the low level of the past seven months. The yield on the German 10-year benchmark government bond closed at 1.94%, up about 5 basis points during the day, moving away from the low level of 1.89% reached on December 7th of last year. The yield on the 2-year German bond closed at 2.36%, down about 1 basis point during the day, continuing to hit a nine-month low. It had briefly risen and surpassed 2.39% after the release of US unemployment data.

The yield on the US 10-year benchmark government bond briefly fell below 3.80% in early Asian trading, hitting a daily low of 3.7944%, approaching the low of 3.78% reached on July 20th, which was the lowest level since 7 years. It quickly rebounded above 3.80% and continued to rise. After the results of the 7-year US bond auction were announced before the stock market opened, the yield on the 7-year bond increased. The increase widened, with the US stock market approaching a 3.86% high at midday, rising about 6 basis points during the day, reaching around 3.84% at the end of the bond market, and rising nearly 5 basis points during the day.

The 2-year US Treasury yield, which is more sensitive to interest rate prospects, fell below 4.24% in early Asian trading, approaching the low of 4.23% set on Wednesday, May 22, and rose above 4.29% at midday, rising about 5 basis points during the day, reaching around 4.28% at the end of the bond market, rising about 4 basis points during the day, rebounding after falling back on Wednesday.

The yields of US bonds of various maturities generally rebounded on Thursday, but failed to erase the decline on Wednesday.

The US dollar index, after hitting a five-month low for consecutive days, rebounded. The yen rose more than 1% to a five-month high during the day, and the offshore renminbi rose to nearly 7.10, hitting a two-week high.

The ICE US Dollar Index (DXY), which tracks the exchange rates of six major currencies including the euro, approached 100.60 before the European stock market, and continued to hit a low since July 27 for the first time after falling below 101.00 on Wednesday. It fell nearly 0.4% during the day. The US stock market briefly rebounded before the market, and the US stock market continued to rise after rebounding in early trading. At midday, it approached 101.30, hitting a daily high, and rose about 0.3% during the day.

By the close of the US stock market on Thursday, the US dollar index was above 101.20, up more than 0.2% during the day; the Bloomberg US Dollar Spot Index, which tracks the exchange rates of the US dollar against ten other currencies, rose more than 0.1%, temporarily leaving the low since July 26, and both the US dollar index and the Bloomberg US Dollar Spot Index ended their four-day decline.

The Bloomberg US Dollar Spot Index rebounded during the day, ending its four-day decline.

Among non-US currencies, the yen rose for the second consecutive day. After Bank of Japan Governor Haruhiko Kuroda mentioned the possibility of a rate hike in January, the USD/JPY fell below the 141.00 level for the first time since the end of July before the European stock market. The US stock market fell below 140.30 in early trading, continuing to hit a low since the end of July, falling 1.1% during the day. At the close of the US stock market, it rose back to 141.40, down about 0.3% during the day. The EUR/USD tested 1.1140 in early European trading, hitting a five-month high for the second consecutive day, and then continued to fall back. The US stock market fell before the market, and at the close of the US stock market, it was below 1.1070, down nearly 0.4% during the day. The GBP/USD approached 1.2830 before the European stock market, hitting a high since early August, and also fell before the US stock market. At the close of the US stock market, it was below 1.2730, down 0.5% during the day. The USD/CHF hit a new high since the Swiss National Bank abandoned the lower limit of the EUR/CHF exchange rate in 2015. The USD/CHF fell below 0.8340 during the day, hitting a new low since 2015. Offshore Renminbi (CNH) against the US dollar maintained an upward trend throughout Thursday, reaching a daily low of 7.1527 at the start of the Asian session and rising to 7.1005 during European stock trading. This is the closest it has come to the 7.10 level since December 15, setting a new intra-day high since December 15. It rose by 522 points during the day, but the gains narrowed later, falling below 7.11 before the US stock market opened. At 5:59 am Beijing time on December 29, the offshore Renminbi against the US dollar was reported at 7.1183 yuan, up 344 points from the end of trading in New York on Wednesday, rebounding strongly after a decline on Wednesday, and rising for the second day this week.

After rising by more than $1,000 for two consecutive days, Bitcoin (BTC) fell back. It rose above $43,700 in early Asian trading on Thursday, approaching $43,800, reaching a new high since December 24, but then continued to decline. It fell below $43,000 before the US stock market opened and dropped to below $42,400 during US stock trading, a drop of about $1,400 from the daily high, a decrease of more than 3%. It closed above $42,600, down nearly 2% in the past 24 hours.

Crude oil hit a two-week low and gave up gains since the Red Sea crisis. US oil fell more than 3%.

International crude oil futures turned higher more than once during the Asian session, but turned lower before European stock trading and continued to decline, with US stocks rising sharply in early trading. At midday, US WTI crude oil approached $71.70, falling more than 3.2% during the day, and Brent crude oil's main contract for March fell to $77.10, down nearly 3.1% during the day.

In the end, crude oil experienced its largest closing decline since December 12, falling for two consecutive days, with the main contract falling to a low since December 15, the day Maersk announced the suspension of container shipping through the Red Sea.

WTI February crude oil futures fell nearly 3.16% to $71.77 per barrel, hitting a closing low since December 15. Brent February crude oil futures fell 1.58% to $78.39 per barrel, hitting a closing low since December 18; Brent March contract fell 3% to $77.15 per barrel, hitting a closing low since December 15.

US gasoline and natural gas futures continued to fluctuate. NYMEX January gasoline futures fell 3.2% to $2.085 per gallon, hitting a low since December 13, falling for two consecutive days; NYMEX February natural gas futures rose more than 4.92% to $2.5570 per million British thermal units, hitting a high since December 5. Gold fell from a five-month high during London trading, while copper dropped from its highest level since July. Nickel also retreated after a rebound, failing to reach the one-month high set in mid-December. Aluminum, which had risen for two consecutive days, bid farewell to its eight-month high. Zinc, which had also risen for two consecutive days, remained relatively stable near its high since mid-November. Lead, which had fallen for two consecutive days, stabilized at a three-week high. Tin, on the other hand, continued its upward trend, reaching a new high since the end of September.

In the Asian session, New York gold futures rose above $2,098, continuing to hit intraday highs since December 4th, with an increase of over 0.2% during the day. However, European stock markets turned downward before the opening, and US stocks fell below $2,080 during the midday session, dropping nearly 0.8%.

In the end, gold futures, which had risen for four consecutive trading days, closed lower. COMEX February gold futures fell 0.46% to $2,083.5 per ounce, falling from the closing record high of $2,093.1 set on Wednesday after rising above $2,090.

Spot gold in the Asian session rose above $2,088, hitting intraday highs for two consecutive days since December 4th, with an increase of over 0.5% during the day. However, during the European and American trading sessions, it generally remained in a downward trend, with US stocks falling below $2,070 and dropping over 0.4% during the day.

Spot gold reached a new three-week high during the Asian session, but fell during the European and American trading sessions.