Year-end Financial Market Overview

On December 31, 4E monitoring showed that U.S. stocks fell broadly on Monday without any significant negative news, with all three major indexes closing down about 1%. Tech stocks, except for Nvidia which rose 0.35%, mostly declined.

However, the U.S. stock market saw the S&P rise about 24%, the Dow Jones up about 13% (both the best since 2021), and the Nasdaq up nearly 30% while achieving the longest consecutive quarterly gains.

The cryptocurrency market is under pressure, with Bitcoin continuing to pull back after reaching a new high on December 17, falling to a low of $91,530 last night, marking a two-week low, down over 15% from its peak, but still up nearly 110% for the year.

Altcoins have also fallen, with many giving back gains from this round. While the overall market is declining, AI concept meme tokens have surged against the trend, such as ai16z and ELIZA reaching new highs with noticeable inflows of capital.

In the foreign exchange market, the U.S. dollar index rose about 0.1% to near a two-year high, with a year-to-date increase of 6.7%; the euro fell 5.7% against the dollar, and the pound fell 1.2%. The oil market saw a slight increase, with WTI crude near $71, rising over 1% during the session.

Spot gold fell over 0.5% to below $2,600, with a year-to-date increase of nearly 27%.

At year-end, financial market trading is light, and profit-taking is prevalent, with tight liquidity making declines the path of least resistance.

Historically, after large institutions sell off risk assets towards the end of the year to balance their portfolios, they often start accumulating positions again at the beginning of the year, with a higher probability of price increases in January.

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