Author — Martin Young, CEO of Farringdon Asset Management

Global Macro Review

• Major markets dip from previous week levels.

US Markets

• US stocks end the year down from highs in November as technology stocks experienced end of year sell off.
• S&P gained 23% for 2024.
• Markest are pricing in 2 interest rate cuts for 2025 down from expectation of 3.
• 10-year treasury yield spike back up following the Trump presidency win with 10-year yield ending the year around 4.6%.
• That’s off the 4.7% high in 2024 but significantly higher than the 3.9% at the start of 2024.
• Anything above 5% represents a clear danger in the market and possible recession signal.
• Trump failed to have the debt ceiling removed and around 38 republicans in the house look set to veto any increases in debt.
• Trump plans are for significant debt increases to cut taxes.
• Farringdon see the magnificent 7 still dominating the market posing over concentration issues in the S&P 500.

EU Markets

• British business confidence has continued to decline.
• Current confidence levels are like Truss budget.
• GBP dropped from 1.30 to 1.24 although all global currencies have dropped relative to USD.

Oil

• Saudi raising oil prices in Asia as OPEC+ hold back planned January increase by 3 months.
• China demand remains subdued.
• US oil production increases may push prices lower.

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Farringdon Capital Ltd is incorporated in the Dubai International Financial Centre (DIFC) under number 4190, and regulated by the Dubai Financial Services Authority (DFSA).

The information contained in this document is for information only and should not be taken as a recommendation to buy or sell. Investors are reminded that past performance is no indication of future performance.