Macro at a Glance
The Federal Reserve reduced benchmark rates by 100 basis points beginning in September, yet paradoxically, the US 10-year Treasury yield rose by an equivalent amount. Following the Fed's December announcement revising inflation targets upward for 2025 and 2026, market sentiment shifted toward a more hawkish outlook. Investor expectations adjusted dramatically, with forecasts for rate cuts in 2025 dropping to two from the previously anticipated four.
South Korea experienced severe political turmoil in early December when President Yoon declared martial law on December 3rd, subsequently rescinding it hours later under public and parliamentary pressure. The National Assembly voted to remove Yoon from office on December 14th. This instability rattled financial markets, with the Kospi index declining 2.5% and the won weakening nearly 3% against the dollar, reaching its lowest level since 2009.
The Swiss National Bank implemented a 50 basis point rate reduction to 0.5% on December 12th—its most significant cut in approximately a decade—to address weak inflation (0.7% in November) and economic uncertainty.
Japan's Nikkei 225 closed 2024 at its highest level since 1989, climbing 20% for the year. Corporate buybacks, shareholder activism, and a weakened yen driving export competitiveness fueled gains concentrated in major corporations. Despite achievements, deflation concerns persisted.
One Sector, One Insight
Basic Materials and Energy
France established an electricity export record in 2024, with a net balance of 85-90 TWh, substantially surpassing the previous peak of 77 TWh in 2002. This contrasts with 2022's challenges when maintenance shutdowns forced France into being a net importer for the first time since 1980. The achievement underscores nuclear power's criticality for European energy security. Tech giants including Google, Microsoft, and Amazon have significantly invested in nuclear infrastructure throughout the year, financing small modular reactor projects and securing agreements with nuclear operators.
Consumption and General Public Services
Vivendi's demerger took effect December 16th following shareholder approval exceeding 97%. The former conglomerate subdivided into four entities: a restructured Vivendi (trading on Euronext Paris), advertising agency Havas (Amsterdam), media group Canal+ (London), and Louis Hachette Group (Euronext Growth). The stated objective of enhancing shareholder value remained unrealized, with the four resulting shares valued at €7.73 collectively compared to the pre-split share price of €8.75.
Financial Services
Donald Trump appointed cryptocurrency advocate Paul Atkins as SEC chair, signaling a potential regulatory pivot toward digital asset innovation. Atkins, a former SEC commissioner critical of excessive regulation, contrasts with outgoing chair Gary Gensler's stricter enforcement approach.
Healthcare
Novo Nordisk disclosed phase III trial results for CagriSema on December 20th, showing 22.7% average weight loss—below market expectations of 25-27% reduction. The announcement triggered a historic share price collapse of 20.72%. Conversely, Eli Lilly received FDA approval for Zepbound on December 21st for treating sleep apnea in obese patients.
Industrials
Honda and Nissan officially commenced merger discussions on December 20th, planning to establish a joint holding company with projected 2026 market listing. Mitsubishi Motors, in which Nissan holds 34.1%, was invited to participate. The combined entity would target $190 billion in sales and over $19 billion in operating profit. Markets responded enthusiastically, with Honda, Nissan, and Mitsubishi appreciating 11%, 37%, and 28% respectively since merger speculation commenced December 17th.
Technology and Network Equipment
Quantum computing surged dramatically, with Quantum Computing Inc. experiencing a 135% surge following a NASA contract announcement on December 16th and achieving 1,730% year-to-date gains. Google's "Willow" chip, capable of solving computational problems in minutes requiring 10 septillion years on classical computers, demonstrates the field's revolutionary potential within medical research, AI, and nuclear fusion applications.
Stock of the Month
Semiconductor specialist Broadcom ascended nearly 43% during December on the New York Stock Exchange, elevating its market capitalization to $1.087 trillion. The company capitalized on Nvidia's difficulties resulting from geopolitical tensions affecting this strategically important sector.
Key Performances
| Index/Asset | December 31 | Monthly Change | Year-to-Date |
|---|---|---|---|
| S&P 500 | 6032.38 | 5.73% | 27.19% |
| Dow Jones | 44910.65 | 7.54% | 19.08% |
| NASDAQ | 19218.17 | 6.21% | 30.15% |
| FTSE 100 | 8287.30 | 2.18% | 7.33% |
| CAC 40 | 7235.11 | -1.57% | -3.93% |
| DAX | 19626.45 | 2.88% | 17.04% |
| SMI 20 | 11764.20 | -0.24% | 5.32% |
| MSCI World | 3810.14 | 2.52% | 20.22% |
| VIX | 13.51 | -41.67% | 2.35% |
| CHF/USD | 1.1339 | -1.67% | -4.54% |
| CHF/EUR | 1.0728 | 0.92% | -0.37% |
| Brent $/bbl | 72.09 | -1.17% | -6.47% |
| Gold Spot $/oz | 2650.35 | -4.44% | 28.47% |
Upcoming Events
- January 10: US Unemployment Rate
- January 15: US Inflation Rate
- January 20: US President's Inauguration
- January 22/28: Visa/Mastercard 4th Quarter Results