The Long and Short of it, week ending 29 Dec 2023
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The 3 major stock indexes moved higher again last week, with the Dow Jones Industrial Average outperforming the Nasdaq Composite and S&P 500 Indexes. The gains came on no new news, with stock prices rising on continued hopes of next-year rate cuts amidst a “soft landing” scenario. On a YoY basis, the Nasdaq Composite Index strongly outpaced the other 2 indexes, increasing 43.4%. The S&P 500 Index rose 24.2% YoY, just failing to reach its record level set in January 2022, while the Dow Jones Industrial Average rose 13.7% YoY. Interestingly, on a 2- year basis the Dow Jones Industrial Average recorded the larger increase, gaining 3.7% over that period while the Nasdaq Composite Index registered a 4.1% loss over that same time frame. The S&P 500 Index edged slightly higher over the last 2 years, increasing 0.1%. For the week, the S&P 500 Index rose 0.3% to 4,769.83, the Nasdaq Composite Index gained 0.8% to 15,011.35, the Dow Jones Industrial Average increased 0.2% to 37,689.54, the 10- year U.S. Treasury rate fell 3bps to 3.87% and the U.S. dollar (as measured by the ICE U.S. Dollar index – DXY) weakened 0.3%.
Quiet, holiday-shortened, 3-day week for European stock markets with both the STOXX 600 and FTSE 100 Indexes rising slightly on the week. Markets continued to benefit from rate-cut expectations for the first half of next year but also seemed to be capped by hawkish ECB and BoE officials’ comments. The FTSE 100 Index also benefited from better-than-expected Chinese economic data though continued to be limited by a stronger British pound relative to the U.S. dollar. For the week, the FTSE 100 Index increased 0.5% to 7,733.24, the STOXX 600 Index rose 0.3% to 479.02, the 10-year Gilt rate rose 3bps to 3.54%, the 10-year Bund rate increased 6bps to 2.03% and the British pound and euro both strengthened 0.3% versus the U.S. dollar
Top performing ETPs over the week
| . | 3x Long ETPs | 3x Short ETPs | ||
|---|---|---|---|---|
| UK | 3x Long BAE Systems (3LBA) | +5.4% | 3x Short Vodafone (3SVO) | +2.9% |
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The Long and Short of it, week ending 29 Dec 2023
