European stock markets are showing modest gains as 2024 comes to a close, with the CAC 40 and London markets slightly up. Low trading volumes during the holiday season have resulted in exaggerated price movements. Investors are looking ahead to 2025, particularly monitoring the upcoming Trump inauguration and China’s economic reforms. Luxury brands like Burberry saw small gains, while the dollar strengthens against the euro. Oil prices also experienced slight increases amid low trading activity.
European Stock Markets Show Modest Gains
European stock markets are showing signs of recovery as they close out a slow trading session on the final day of 2024. With only a handful of investors active during this festive period, preparations for the upcoming year are underway. As of 9:05 GMT, the CAC 40 index in Paris registered a slight uptick of +0.17%, with trading set to conclude around 1 PM GMT. Similarly, London’s market saw a minor rise of +0.12%, with its trading session ending around 12:30 PM GMT. Notably, both the Frankfurt and Milan exchanges remain closed on this day. The New Year celebrations will also see European, Asian, and American markets shut down on Wednesday.
Market Sentiment and Future Outlook
According to Ipek Ozkardeskaya, an analyst from Swissquote Bank, “this week, trading volumes are low” due to the holiday season, leading to “exaggerated price movements” in response to even minor shifts in the market. Investors are now shifting their focus to 2025, as the first weeks of the new year are expected to shed light on prevailing uncertainties.
The upcoming inauguration of Donald Trump on January 20 has the financial world on alert, with his economic policies—especially concerning tariffs and immigration—being closely monitored for their potential impact on inflation and the Federal Reserve’s monetary strategies.
China is also drawing attention, as President Xi Jinping outlined the nation’s economic plans for 2025. He emphasized the need for deeper reforms and more effective macroeconomic policies during an official New Year reception. Following an economic downturn exacerbated by a real estate crisis and rising public debt, China is striving to stabilize its economy. In Asian markets, Shanghai saw a decline of 1.63%, while Shenzhen dropped by 2.40%, with Hong Kong remaining steady at +0.09%. Ipek Ozkardeskaya forecasts a positive outlook for 2025, suggesting that easing central bank policies and declining yields may benefit both American tech giants and European markets.
In the tech sector, stocks have thrived in 2024, driven by enthusiasm for artificial intelligence, propelling major American companies like Nvidia to new heights. As of 8:40 GMT, the yield on the ten-year U.S. bond was at 4.51%, a slight decrease from the previous day’s 4.53%.
Luxury Brands and Currency Trends
In luxury retail, Burberry experienced a 1.48% increase around 9 AM GMT on Tuesday, following President Xi’s remarks. Other brands in the sector showed mixed results, with Dior up by 0.17%, LVMH stable at +0.02%, and Kering down by 0.19%.
The year 2024 has highlighted a stark contrast between a robust American economy and a sluggish eurozone, a trend also evident in currency markets. Ipek Ozkardeskaya notes that “the Dollar Index is strengthening, maintaining its highest levels in over two years,” with expectations of further gains as the Fed adopts a less accommodating stance. At 8:40 GMT, the dollar held steady at -0.05% against the euro, trading at 1.0412 dollars per euro.
In a market characterized by low trading activity, oil prices experienced a slight increase on Tuesday. At 8:40 GMT, North Sea Brent crude rose by 0.62% to $74.45, while its American counterpart, West Texas Intermediate (WTI), climbed by 0.69% to $71.48.