Investing.com - Here are the top five things you need to know in financial markets on Friday, December 29:
1. Global stocks enter last day of trade near record highs
Though trading remains thin at the end of the holiday season, global equities were on track to end a very profitable year near record highs.
Even as the Dow ended Thursday at record highs, all three major U.S. indices were set for monthly gains and U.S. futures pointed to another move higher with no economic data on the calendar to threaten the bullish trend at the end of the year.
In the last day of trading for U.S. stocks, the Dow was on track for annual gains of more than 25%, the S&P 500 was up 20%, while the Nasdaq Composite led the pack with a rally of around 29%.
At 6:05AM ET (11:05GMT) Friday, the blue-chip Dow futures rose 61 points, or 0.25%, S&P 500 futures advanced 9 points, or 0.32%, while the Nasdaq 100 futures gained 12 points, or 0.19%.
Elsewhere, European shares were set to record their strongest year of gains since 2013 thanks to a surge among tech stocks and a robust resources sector. The broad-based pan-European Stoxx 600 has rallied about 8%. Over in the UK, although the FTSE 100 hit a fresh all-time high on Friday, the London benchmark was the laggard among European bourses with gains of about 6.9%.
Earlier, Asian shares ended Friday with mixed signs, but the MSCI AC Asia Pacific was just below a decade-long high after rallying 29% in 2017. Japan’s Nikkei 225 pocketed gains of 20% this year.
2. Bitcoin set to end volatile December with stellar annual gains
Bitcoin was trading higher on Friday after yet another heavy selloff a day earlier on the back of an announcement from the South Korean government announced that it would take several steps to combat speculation in digital currency trading.
South Korea is a key country for trading in the largest cryptocurrency by market cap as it is calculated that 20% of all Bitcoin transactions take place there and that its citizens own around 1 million bitcoins.
Despite constant warnings that Bitcoin was a “bubble”, “fraud”, “Ponzi scheme” or the like, the popular alternative currency was on track for a stunning rally more than 1,300% in 2017, leaving investors to face the question of whether the "value-less" asset could repeat the performance in 2018.
However, the cryptocurrency is well known for its volatility with huge intraday moves on almost a daily basis. Point in case has been the last two weeks after hitting its all-time high on December 17 only to proceed into a bear market with a plunge of around 46%, followed by a recovery of about half those losses. At the time of writing, Bitcoin is down 28.9% from its all-time highs reached less than two weeks ago.
On the Bitfinex exchange, Bitcoin was last trading up $660.00 or 4.95%, to $14,004.00 by 6:06AM ET (11:06GMT).
3. Oil tracks yearly gains above 10% as focus shifts to OPEC-shale battle
Oil prices continued to march higher on Friday, support by a weaker-than-expected reading of U.S. shale production and a larger-than-forecast drop in weekly U.S. inventory data.
The U.S. benchmark was last on track for annual gains of nearly 12% while the London barrel was up nearly 17% for the year.
U.S. oil production surprisingly dropped to 9.754 million barrels per day (bpd), down from 9.789 million bpd the previous week, according to data from the Energy Information Administration (EIA) released late on Thursday.
U.S. crude output has risen by around 16% since mid-2016, but analysts had forecast it to surpass 10 million bpd by the end of 2017.
Earlier on Thursday, oil stockpiles stateside fell by a more-than-expected 4.6 million barrels, helping to support bullish sentiment in black gold.
U.S. shale production will be a focus looking ahead to 2018 as market participants evaluate whether increased production in the U.S. will derail OPEC attempts to curb output and rebalance global markets.
Investors will get their latest glimpse of U.S. output when Baker releases its most recent weekly rig count data.
4. Dollar hovers near 3-month low
On a day without any major U.S. economic reports, the dollar hovered near a 3-month low which some observers suggested was primarily due to market participants taking money off the table after U.S. President Donald Trump officially signed the tax overhaul into law.
At 6:06AM ET (11:06GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, lost 0.32% at 92.04. That was its lowest level since the end of September in its fourth consecutive session of losses.
In 2017, the dollar index has dropped nearly 10%.
5. Gold prices head for best annual rally since 2010
The aforementioned dollar weakness propelled gold to its best annual performance since 2010. A weaker greenback makes the precious metal more affordable for holders of foreign currency.
While looking ahead to 2018, the precious metal has also benefitted this year from investors piling into the safe-haven asset in the face of continuous geopolitical tension. North Korea has been at the forefront of those worries as the U.S., China, North Korea and Japan all work to curb Pyonyang’s nuclear program.
On Friday, Comex gold futures rose 0.19% to an intraday high of $1,299.60 a troy ounce by 6:07AM ET (11:07GMT).
That was a fourth straight session of gains, while on track for a weekly rise of around 1.6%.