Read the 5 main market news this Tuesday

US stock futures point to a muted start to 2024 after a blockbuster year on Wall Street. China's BYD reveals fourth-quarter production numbers that put pressure on Tesla's position as the world's largest electric vehicle maker.

A Bitcoin surpasses $45,000, driven by expectations that U.S. securities regulators may be moving closer to approving an exchange-traded fund that tracks the cryptocurrency. In Brazil, the stock exchange index Ibovespa ends 2023 with an increase of more than 20%.

1. FIRST TRADING SESSION OF 2024

U.S. stock futures hovered around the flat line ahead of the start of a new business year, as investors try to gauge the staying power of an exceptional 2023 for stocks on Wall Street.

At 7:57 am (Brasília time), the contract Dow futures rose 0.1%, the S&P 500 futures gained 0.03%, and the Nasdaq 100 futures fell 0.16%. The markets were closed for the New Year's Day holiday on Monday (1 January 2024).

Major indexes rose last year despite early concerns that an unprecedented series of interest rate hikes from the Federal Reserve could trigger a recession. But the resilience of the U.S. economy helped fuel optimism that the Fed could engineer the so-called “soft landing”in which inflation is cooled without causing an economic collapse.

Investors will have the chance to analyze a series of new data this week that could shed light on the situation of the world's largest economy – and, particularly, its all-important labor market – in the final days of 2023.

The major averages fell slightly on Friday, though the declines did little to detract from what was a stellar 2023 on Wall Street.

The benchmark S&P 500 saw an annual increase of 24.2%, ending the year with a nine-week winning streak – the best since 2004. The high-tech index Nasdaq Composite also rose 43.4%, driven in part by the strength of megacapacity stocks and emerging enthusiasm about the potential applications of artificial intelligence.

Meanwhile, the 30-stock index Dow Jones Industrial Average saw a 13.7% jump, driven by 7 record closing levels in the final days of the year.

Stocks have suffered several shocks throughout 2023, including a regional banking crisis marked by the collapse of Silicon Valley Bank and the outbreak of renewed hostilities in the Middle East. Attention now turns to the new year, with some analysts wondering whether 2023's solid returns may have left stock valuations inflated.

2. BYD PRODUCTION PRESSES TESLA

BYD (SZ:002594), China, said it sold a record 526,000 battery-powered cars in the fourth quarter, putting further pressure on the position of US rival Tesla (NASDAQ: Tesla).TSLA) as the world's largest manufacturer of electric vehicles (EVs).

By 2023, BYD, headquartered in Shenzhen, also sold more than 3 million new EVs and hybrids, an increase of approximately 62%, showed figures released by the company on Monday (1.Jan). The result leaves Elon Musk's Tesla, which only offers battery-powered cars, potentially on track to sell fewer cars than BYD for the second year in a row.

Tesla's production in the first 9 months of 2023 was 1.35 million cars. The group is expected to release its production and delivery figures for the entire year on Tuesday (Jan 2).

BYD, which has Berkshire Hathaway (NYSE:BRKa) of Warren Buffett as a major investor, controlled about 17% of the global electric-only vehicle market at the end of the 3rd quarter, equaling Tesla's market share.

3. BITCOIN EXCEEDS US$45,000

Bitcoin rose sharply to a 21-month high on Tuesday (Jan 2) as speculation grew that the U.S. Securities and Exchange Commission was close to approving an exchange-traded fund (ETF) for the world's largest cryptocurrency. world. At 7:57 am (Brasília time), Bitcoin had jumped 7.25% to US$45,482.

The surge came as an extension of a strong rally in 2023 for Bitcoin, when the token rose more than 100% in value after starting the year at around $17,000.

In part, what drove the gains was speculation about the SEC's approval of an ETF that directly tracks Bitcoin prices. The regulator has a deadline of January 10 to approve or reject a spot ETF application from Ark and 21 Shares, according to a report from Reuters. The decision could set the precedent for ETF applications from several other fund managers for a similar product.

4. OIL RISES

Oil prices rose on Tuesday (Jan 2), recovering after major losses in 2023, due to concerns about possible supply disruptions in the Middle East.

News reports indicated that an Iranian warship had entered the Red Sea, a vital trade route between Europe and Asia. The fallout has raised fears about the flow of supplies in the region, which has been hit recently by a series of attacks by the Iran-backed Houthis against several military and commercial ships.

At 7:57 am the futures of US oil were trading 1.79% higher at US$73.44 per barrel, while the Brent it had risen 1.93% to US$78.97 per barrel.

Both benchmark contracts had fallen more than 10% each in 2023, being pressured by lingering concerns about sluggish demand and higher-than-expected supply conditions.

5. IBOVESPA RAISES MORE THAN 20% IN ONE YEAR

Ibovespa, an index that is a reference on the Brazilian stock exchange, closed the year 2023 with an increase of more than 20%, given the expectation that the Federal Reserve, the American monetary authority, has ended its cycle of rising interest rates and should begin reducing in 2024 amid the economy's disinflation process.

The Brazilian stock market, in this way, recorded the best performance since 2019, closing above 134 thousand points, with relief in the yields on United States Treasury bonds and reductions in the local interest rate, the Selic. The period was also marked by the decrease in inflation, approval of tax reform and the new fiscal framework. The income tax reform, however, should only last until 2025.

Manager Rodrigo Octavio Marques, partner at Nest, assesses that the markets' engines used up gasoline in 2023 and will lose strength in 2024. “There is inertia, you can drive now with the engine turned off in 2024, but at some point the frictions will start to hold back some of the markets’ performance”he stated.

At 7:57 am (Brasília time), the ETF EWZ (NYSE:EWZ) rose 0.06% in pre-market.

With information from Investing Brasil.