Berliner Boersenzeitung - Global stocks stall, bitcoin soars to new peak

Wall Street offered little cheer as the Dow marked time although the tech-heavy Nasdaq and the broad-based S&P 500 were just in the green some two hours into trading.

But Europe and Asia all lost ground as traders fret over political instability in France and Germany.

Bitcoin, meanwhile, hit a new record high, reaching $107,115.89 as it continues to gain support from Donald Trump's backing of cryptocurrencies.

Investors are turning their attention to Wednesday's US Federal Reserve decision on borrowing costs at its last policy meeting of the year before Trump takes office next month.

The Fed is widely expected to cut its key lending rate for a third straight time, reducing it by a quarter point despite a recent uptick in inflation.

But there are fears it will have to slow its pace of easing next year owing to sticky inflation and bets that Trump's tax cuts and tariffs will reignite price increases.

"It will come as no surprise to investors to hear that the final full week of trading in global markets in 2024 has started with more gains for the US while Europe struggles," said Chris Beauchamp, chief market analyst at online trading platform IG, identifying a nascent "Santa rally" on Wall Street.

Regarding Europe, he noted that "Germany is now set for elections early next year, promising to throw in a new ingredient to Europe's heady brew of political instability." Regarding France, while the country now has a new prime minister, "the problems he faces remain intractable".

Kathleen Brooks, research director at trading platform XTB, said meanwhile that there would be "an elephant in the room" at the Fed meeting.

"How to accurately forecast economic activity and inflation rates, when the President-elect's policies are expected to have a huge economic impact and could trigger more inflation?" she wrote.

- China and Europe worries -

Investors also tracked data showing that Chinese retail sales grew 3.0 percent last month, much slower than in October and well off the five percent forecast.

Hong Kong and Shanghai stock markets closed lower after the data release while oil prices fell slightly on concerns over Chinese demand.

Chinese officials have unveiled a string of aggressive measures in recent months aimed at bolstering growth in the world's second-biggest economy.

In Europe, the Paris stock market fell 0.7 percent after Moody's downgraded France's credit rating Saturday following months of political crisis and the appointment of centrist Francois Bayrou as prime minister.

"The market is likely to watch closely to see how the political problems in France affect sentiment in the German economy," said Jochen Stanzl, an analyst at CMC Markets.

Frankfurt slid 0.5 percent as Germany's embattled centre-left Chancellor Olaf Scholz lost a confidence vote, triggering elections set for February 23.

The European Central Bank cut rates again last week as inflation appears to come under control and the eurozone economy shows signs of weakness.

ECB chief Christine Lagarde said Monday that the bank would keep lowering interest rates, while warning that higher US tariffs under Trump could hit growth in the bloc.

A closely watched survey released Monday showed that business activity declined further in the eurozone in December, though less sharply than the previous month thanks to an upturn in the services sector.

In London, the UK government approved the £3.6 billion ($4.5 billion) takeover of Royal Mail's parent company, International Distribution Services (IDS), by Czech billionaire Daniel Kretinsky's EP Group.

IDS shares added 0.8 percent.

- Key figures around 1645 GMT -

New York - Dow: FLAT at 43,815.96 points

New York - S&P 500: UP 0.3 percent at 6,071.18

New York - Nasdaq: UP 0.8 percent at 20,083.95

Paris - CAC 40: DOWN 0.7 percent at 7,357.08 (close)

Frankfurt - DAX: DOWN 0.5 percent at 20,313.81 (close)

London - FTSE 100: DOWN 0.5 percent at 8,262.05 (close)

Tokyo - Nikkei 225: FLAT at 39,457.49 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 19,795.49 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,386.33 (close)

Euro/dollar: UNCHANGED at $1.0504 from Friday

Pound/dollar: UP at $1.2690 from $1.2622

Dollar/yen: UP at 154.24 yen from 153.60 yen

Euro/pound: DOWN at 82.76 pence from 83.19 pence

West Texas Intermediate: DOWN 0.9 percent at $70.63 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $73.86 per barrel

(T.Burkhard--BBZ)