Commodity markets also saw strong volatility last week, with the US stock market weakening, while the gold market rebounded. Notably, Arabica coffee prices hit a 50-year high.
At the end of the financial economic news session on December 13, the Dow Jones index decreased 0.2%, closing at 43,828.06 points. Meanwhile, the Nasdaq Composite decreased slightly 0.12%, down to 19,926.72 points. The S&P 500 was almost unchanged, ending the day at 6,051.09 points.
The US stock market was generally weak last week, with the Dow Jones down 1.8% and the S&P 500 losing 0.6%, ending a three-week winning streak. In contrast, the Nasdaq Composite rose slightly 0.3%.
Meanwhile, in the precious metals market, spot gold fell 1.1% to $2,652.29 an ounce as the US dollar held at its highest level in more than two weeks. Gold futures also lost 1.1% to close at $2,678.50 an ounce.
However, gold prices still recorded an upward trend during the week, reaching the highest level since November 6 in the session of December 12, and increasing by more than 0.8% since the beginning of the week.
Last week, Arabica coffee prices continued to hit a new high, the highest level in 50 years, reaching 348.35 cents/lb. Since the beginning of the year, coffee prices have increased by 70%.
At 24:00 on December 14, the price of Arabica coffee futures for March delivery and the price of Robusta coffee for the same delivery were traded at 318.95 cents/pound and 5,201 USD/ton, respectively.
On the same day, Volcafe - one of the world's leading coffee trading companies based in Switzerland - cut its forecast for Brazil's Arabica coffee production in the 2025/26 crop year to 34.4 million bags, down 11 million bags from the previous estimate, showing the severity of the prolonged drought in Brazil.
In the energy market, oil prices recorded impressive gains. Brent crude futures rose 1.5% to $74.49/barrel, while WTI crude rose 1.8% to $71.29/barrel. This was the highest closing price of Brent crude since November 22, helping prices increase 5% for the week, while WTI crude rose 6%, reaching its highest level since November 7.
According to financial and economic news, experts said that this increase is supported by many factors, including a more positive economic outlook for China, political instability in the Middle East, and expectations that the US will impose more sanctions on Russia and Iran. In addition, expectations that the US Federal Reserve (Fed) will lower interest rates also create positive momentum for oil prices.
The market is expecting the Fed to cut interest rates by 0.25 percentage points at its meeting on December 17-18, and possibly make 3-4 more cuts in 2024, bringing the interest rate range down to 3.5%-4%.
However, inflation remains a major risk. The personal consumption expenditures (PCE) price index, due for release on December 20, is expected to rise to 2.5% from 2.3% on a year-over-year basis. If inflation continues to trend upward, the Fed may have difficulty making aggressive rate cuts, putting pressure on the already overvalued market. Stay tuned. HVA to update and grasp the fastest information about the financial market every day.
