The Day at a Glance | December 26 2024

The Top

● The World Bank raises China’s GDP growth projections for 2024 and 2025.

● Efforts to stabilize and prevent further declines in China’s real estate market will continue into 2025, according to China Construction News, citing a work conference held on Tuesday and Wednesday by the housing regulator.

● For the week ending December 21, U.S. initial unemployment insurance claims came in at 219,000 (224,000 expected), slightly lower than the previous week’s 220,000.

● The Bank of Japan expects the economy to move closer to sustainably achieving the central bank’s 2% inflation target next year, Governor Kazuo Ueda stated, suggesting that the timing of the next interest rate hike is drawing near.

● According to Reuters, Taiwan’s Presidential Office conducted its first exercise simulating a military escalation with China, as the island faces renewed Chinese military threats.

● South Korea’s main opposition party introduced a bill on Thursday to impeach acting President Han Duck-soo, a day before it plans to put the measure to a vote. This move could deepen a constitutional crisis triggered by a brief implementation of martial law.

● Oil prices rose on Thursday amid thin holiday trading, driven by hopes of additional fiscal stimulus in China and supported by an industry report showing a decline in U.S. crude inventories.

Economic Environment

The World Bank has raised its GDP growth projections for China in 2024 and 2025. On Thursday, the organization revised upward its forecast for China’s economic growth, citing short-term benefits from recent policy easing and strong exports. However, it warned that weak household and business confidence, coupled with persistent challenges in the real estate sector, will continue to weigh on the economy next year. The World Bank now forecasts China’s GDP to grow by 4.9% in 2024, slightly above its June projection of 4.8%. For its part, Beijing has set a growth target of around 5% for 2025, a goal it asserts is achievable. In this context, Chinese authorities have reportedly agreed to issue a record 3 trillion yuan ($411 billion) in special Treasury bonds next year, according to Reuters. However, these figures will not be officially confirmed until the annual session of the National People’s Congress in March 2025, leaving room for potential adjustments. Meanwhile, efforts by the housing regulator to stabilize the market are expected to continue throughout the year, although the World Bank anticipates that significant recovery in this sector will not occur until late 2025.Overall, the world’s second-largest economy has faced significant challenges this year, primarily due to a severe real estate crisis and weak domestic demand. Finally, a potential increase in U.S. tariffs on Chinese products, once President-elect Donald Trump takes office in January, could further impact growth prospects.

Markets and companies

Futures for major U.S. indices started the day with gains. In Europe, markets remain closed for the holiday season after ending their last session mostly higher. In Asia, markets closed on a positive note, with reports from Japan highlighting a record budget for 2025.

In the commodities market, oil prices posted slight gains, supported by expectations of increased crude demand in China driven by fiscal stimulus. Meanwhile, precious metals showed positive performance, with gold standing out as it reached $2,624 per ounce.

In the fixed income market, the 10-year U.S. Treasury yield is at 4.64%, while the 2-year yield remains at 4.36%.

IPC futures are trading higher, at 50,398 points, while the exchange rate stands at 20.15 pesos per dollar, slightly below the 20.16 from the previous close.

Corporate news

Nvidia shares were the most traded this year, primarily driven by retail investors betting on the growth of artificial intelligence.

Chinese conglomerate, Alibaba, is close to merging its South Korean business with E-Mart.

On Tuesday morning, December 24, American Airlines experienced a system-wide disruption, forcing a temporary halt to all flights due to computer glitch. The incident led to a widespread suspension of operations.