Trading results for 10 January 2025

Investors endured a disappointing trading session on Friday, 10 January. At some point, it might have seemed like investors had begun recovering from the correctional sentiment that had developed during the first few trading days of the new year. Plus, there were expectations that, with the conclusion of the holidays, more and more investors would be pulled into the market and start buying stocks more actively. Perhaps that would have been the case if the macroeconomic data on the US labour market that was released before the start of Friday’ main trading session had not turned out to be much better than analysts’ forecasts (256,000 new jobs were created in December instead of the expected 165,000). How is that bad news? It may seem paradoxical, but the better the economy, the worse it is for the stock market. If the labour market is doing well and inflation remains sufficiently high, the Federal Reserve may not be in a hurry to cut rates. Moreover, there was speculation that the Fed could even start raising rates again. The latter thought drove a stake through the heart of market sentiment on Friday. All major US indexes fell sharply following the release of the labour market data, remaining well in the red throughout the session and closing the day with a 1.6% loss across the board.

Naturally, under such conditions both the ITS World (ITSW) global market index and the ITS Shariah (ITSS) Islamic securities index were unable to resist the selling pressure and experienced losses comparable to those of the US indexes.

Only 5 of the 50 stocks in the ITSW index ended the day in positive territory. Leading the way was the pharmaceutical giant Eli Lilly (LLY, +1.61%). It was followed by the well-known British pharmaceutical company AstraZeneca (AZN,+0.65%) and a couple of oil producers, Britain’s Shell (SHEL, +0.34%) and Brazil’s Rio Tinto (RIO, +0.36%). However, the combined efforts of the pharmaceutical and energy sectors were not enough to counter the widespread negativity that swept through the market on Friday.

Despite the first trading days of the new year, which didn’t provide much reason for optimism, it is too early to draw any far-reaching conclusions. The year has just begun, and the situation could change radically in the coming week, with the release of macroeconomic data (consumer and production inflation figures as well as retail sales data) and the start of the new corporate earnings season on 15 January. In addition, trading volumes are expected to increase as well-rested investors become more active following the holidays.