European indices have once again entered the fray on a downbeat tone, with yesterday’s tech-led rally failing to inspire confidence for the likes of the FTSE and DAX. The relative positivity seen on the other side of the Atlantic has been evident of late, with European markets typically losing ground in the morning, only to regain those losses once US markets enter the fray. This morning’s German industrial production data serves to highlight the ongoing battle underway in Europe, with the regions reliance on manufacturing playing a key role in driving economic underperformance. The November figure of -0.7% represents the sixth consecutive negative reading, with the long-term deterioration evident from the fact that manufacturing production in Germany now stands 13% below its 2017 peak.
Yesterday saw Nvidia inspire a tech rally, as markets begin to gear up for another AI-dominated earnings season in the weeks to come. While the company is widely considered the primary supplier of AI chips, they have been announcing their latest gaming graphics processors ahead of the Vegas Consumer Electronics Show. Nonetheless, the wider strength seen across the tech sector highlights the expectation that they will enjoy a strong 2024 as expanding AI revenues tally up with period of rate cuts.
Bitcoin remains the talk of the town, with the cryptocurrency breaching $47,000 yesterday on speculation that we will finally see the SEC approve a raft of spot Bitcoin ETF products as early as tomorrow. With each applicant having announced the fees associated with their ETF, the signals are very clearly pointing towards approval from the regulator. The hope for Bitcoin enthusiasts is that this move will finally take crypto into the mainstream, allowing fund managers and more traditional market participants the ability to allocate a percent of their portfolio to this fast-moving asset. Coming off the back of a year that saw Bitcoin gain 155%, bulls continue to look towards the April halving event as the potential beginning of a bull run that could count Wall Street as one of the main drivers of demand.
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