Global Markets Recap: December 5th, 2024 - US Stocks Dip, Bitcoin Plunge Triggers Over 200,000 Liquidations

Global Markets Recap: December 5th, 2024 - US Stocks Dip, Bitcoin Plunge Triggers Over 200,000 LiquidationsThursday, December 5th, 2024 saw a volatile day in global markets. US stocks experienced slight declines, while Bitcoin, after briefly exceeding $100,000, suffered a sharp correction, resulting in over 200,000 liquidations

Global Markets Recap: December 5th, 2024 - US Stocks Dip, Bitcoin Plunge Triggers Over 200,000 Liquidations

Thursday, December 5th, 2024 saw a volatile day in global markets. US stocks experienced slight declines, while Bitcoin, after briefly exceeding $100,000, suffered a sharp correction, resulting in over 200,000 liquidations. Other key events included a reported collaboration between TSMC and Nvidia, the CME Group's announcement of a 1-ounce gold futures contract, and an extension of voluntary oil production cuts by major oil-producing nations.

US Stocks See Slight Dip Amid Economic Data Concerns

All three major US stock indices the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 closed slightly lower on Thursday. The Dow fell 248.33 points (0.55%) to 44765.71, the Nasdaq declined 34.86 points (0.18%) to 19700.26, and the S&P 500 dropped 11.38 points (0.19%) to 6075.11. While the S&P 500 and Nasdaq briefly touched record highs intraday, reaching 6094.55 and 19790.03 respectively, they ultimately closed in negative territory.

This volatility was linked to the release of US economic data. The Labor Department reported that initial jobless claims rose unexpectedly to 224,000, exceeding economists' average forecast of 215,000. This fueled concerns about the US economic growth outlook, leading to a market pullback.

Despite recent record highs for US stocks including the Dow closing above 45,000 for the first time on Wednesday and the S&P 500 reaching a record closing high for the 56th time this year BlackRock's 2025 outlook, while recommending further "overweighting" of US equities, warned that valuations are nearing levels seen during the dot-com bubble of 2000. Conversely, Tony Pasquariello, Goldman Sachs' Global Head of Hedge Fund Prime Brokerage, expressed optimism, suggesting that US stocks still have upward momentum and predicting continued gains if economic growth, Federal Reserve policy predictions, and technical factors align favorably.

Large tech stocks showed mixed performance. Tesla led the gains with an increase of over 3%, while other tech giants such as Nvidia and Meta (Facebook) saw declines. Microsoft rose over 1%, Amazon over 1%, and Apple edged up by 0.01%, while Nvidia fell 0.05%, Facebook dropped 0.79%, and Google decreased by approximately 1%.

TSMC and Nvidia Collaboration to Boost High-End Chip Production

Reports surfaced of a collaboration between chip giants TSMC and Nvidia. TSMC is reportedly in talks with Nvidia to manufacture its Blackwell AI chips at its new Arizona facility, with mass production slated to begin in 2025. Nvidia's Blackwell chip, launched in March 2024, is designed for generative AI and accelerated computing, offering speeds up to 30 times faster than previous chips. This partnership would enhance TSMC's US manufacturing capabilities and provide Nvidia with a stronger chip supply chain.

CME Group Launches 1-Ounce Gold Futures Contract, Lowering Barrier to Entry

The CME Group announced the launch of a 1-ounce gold futures contract, starting January 13th, 2025, aiming to provide retail investors with greater access to the gold market. This move reflects the growing interest in gold investment among retail investors in recent years. Jin Hennig, CME Group's Global Head of Metals, stated that the 1-ounce contract would lower the barrier to entry, enabling broader retail participation.

OPEC+ Extends Production Cuts; IEA Predicts Oil Supply Surplus

The Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) announced an extension of their voluntary daily production cut of 2.2 million barrels to the end of March 2025. They also extended their overall crude oil production target of 39.725 million barrels per day from 2025 to 2026. OPEC cited the aim of maintaining stability in the international oil market.

However, the International Energy Agency (IEA) released a report warning that, even considering the current OPEC+ cuts, a global oil supply surplus of over 1 million barrels per day is anticipated in 2025. This contrasts with OPEC's statement, highlighting differing market expectations regarding future oil supply. WTI crude oil for January delivery closed down $0.24 (0.35%) at $68.30 per barrel on Thursday.

Bitcoin Crash Triggers Over 200,000 Liquidations

Bitcoin experienced significant volatility on Thursday. After briefly surpassing $100,000, reaching a new all-time high, it sharply corrected, falling below $90,000 at one point. This triggered liquidations for over 200,000 traders, impacting cryptocurrency-related stocks; BitDigital dropped over 9%, MicroStrategy fell nearly 5%, and Coinbase declined by over 3%. The dramatic price swings highlighted the inherent risks and volatility within the cryptocurrency market.

In summary, December 5th, 2024, witnessed considerable volatility across global markets. Slight declines in US stocks, a Bitcoin crash, an extension of oil production cuts, and the TSMC-Nvidia collaboration shaped the day's key events. These developments reflect the uncertainty in the current global economic and financial landscape, underscoring the need for investors to closely monitor market trends.