Nasdaq Slides, Dollar Fluctuates Ahead of NFP

　　

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The stock market closed with mixed results as the Nasdaq Composite sustained its longest losing streak since October 2022, dropping by 0.56% while the S&P 500 experienced its fourth consecutive decline. Mega-cap tech stocks, especially Apple, faced significant underperformance due to valuation concerns and Federal Reserve uncertainties. Despite this downturn, some analysts remain optimistic about long-term prospects, expecting the S&P 500 to potentially reach 5,000 by year’s end. Meanwhile, in the currency market, the US Dollar Index showed fluctuations, influenced by investor caution ahead of crucial NFP figures and positive ADP readings. Major currency pairs reacted differently to economic data and risk sentiment, shaping their dynamics against the US dollar, while gold and silver regained momentum amidst the shifting landscape.

Stock Market Updates

The stock market closed with mixed results as the Nasdaq Composite sustained its longest losing streak since October 2022, sliding by 0.56% to 14,510.30. This decline reflects a broader trend, with the index losing nearly 4% since its closing on December 27. Conversely, the S&P 500 experienced a fourth consecutive day of declines, dropping by 0.34% to 4,688.68, while the Dow Jones Industrial Average managed a slight gain of 0.03% to close at 37,440.34. Mega-cap tech stocks like Apple faced substantial underperformance due to concerns over inflated valuations and uncertainty about the Federal Reserve’s potential rate cuts. Apple specifically saw a more than 5% decrease in stock value this week, further exacerbated by recent downgrades from Piper Sandler and Barclays.

Despite the recent market downturn, some analysts remain optimistic about the market’s long-term prospects. He downplays the significance of the recent pullback, considering it more of a statistical fluctuation rather than a substantial indicator of market direction. Suggesting the potential for the S&P 500 to reach around 5,000 by the year’s end, indicating a more than 6% upside from the current levels, highlighting his positive outlook amid the present market fluctuations.

Data by Bloomberg

On Thursday, the overall market experienced a slight dip of 0.34%. Among the sectors, Health Care saw a positive uptick of 0.46%, followed by Financials at 0.24% and Industrials at 0.10%. On the downside, Energy suffered the most with a significant decrease of 1.63%, while Consumer Discretionary, Communication Services, and Information Technology also faced notable declines of 0.97%, 0.69%, and 0.64%, respectively. Additionally, Consumer Staples, Real Estate, Utilities, and Materials all experienced minor decreases ranging from -0.15% to -0.33%.

Currency Market Updates

In the latest currency market updates, the US Dollar Index (DXY) showcased a fluctuating performance, hovering around 102.40 following a brief dip to 102.00. Investor caution before the release of crucial NFP figures boosted the dollar amidst mixed risk appetite trends. The positive ADP readings reinforced optimism for December Payrolls, aligning with a rebound in US stocks that revisited the 37700 zone according to the Dow Jones index. The dollar found support from market digestion of the somewhat hawkish tone in the FOMC Minutes and a robust ADP report, while weekly Initial Claims rose by 202K in the week to December 30.

Meanwhile, the EUR/USD pair recovered some ground, touching the 1.0970 zone, and encountering initial resistance despite German flash inflation figures revealing a 3.7% CPI rise in December. GBP/USD initially surged past 1.2700 on upbeat final Services PMI data for December but later retreated to around 1.2660. In contrast, the Japanese yen faced sustained selling pressure, propelling USD/JPY toward the 145.00 barrier amid increased risk appetite and rising US yields. AUD/USD experienced its fifth consecutive drop despite the absence of clear direction in the US dollar and positive readings from China’s Caixin Services PMI. The Canadian dollar, despite weakening, aimed for a retest of two-week highs against the USD ahead of the Canadian labor market report.

Amidst this dynamic landscape, Gold regained momentum, testing the $2040 region per troy ounce, while Silver bounced back from three-week lows, reclaiming the $23.00 per ounce mark despite recent downward trends. The currency market showcased a mix of trends, influenced by economic data, risk sentiment, and fluctuations in key commodities, defining the movement of major currency pairs and their relationship with the US dollar.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
CAD	Employment Change	21:30	12.2K
CAD	Unemployment Rate	21:30	5.9%
USD	Average Hourly Earnings m/m	21:30	0.3%
USD	Non-Farm Employment Change	21:30	168K
USD	Unemployment Rate	21:30	3.8%
USD	ISM Services PMI	23:00	52.5

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