Weekly Market Report

Weekly Market Report

Last week, the MSCI All Country World Index (MSCI ACWI) surged 2.6%. In the US, the S&P 500 Index closed 2.5% higher, recording its seventh consecutive week of gains – the longest streak for the S&P 500 since 2017. The gains lifted the S&P 500 and the technology-heavy Nasdaq Composite – advancing 2.9% over the week – to 52-week highs and the Dow Jones Industrial Average to a record. Continuing a recent pattern, the week’s gains were also broadly based. An equally weighted index of S&P 500 stocks outpaced its market-weighted counterpart by 131bp. Small caps outperformed large caps as did value versus growth. The Russell 1000 Growth Index returned 2.2%, the Russell 1000 Value Index 3.3% and the Russell 2000 Index 5.6%.

In Europe, the MSCI Europe ex UK Index gained 1.1% as financial markets appeared to increasingly expect key central banks to cut interest rates in 2024. Major stock indexes were mixed. Germany’s DAX Index was broadly flat, France’s CAC 40 Index put on 0.9% and Italy’s FTSE MIB Index gave up -0.1%. The euro appreciated versus the US dollar, ending the week at USD 1.09 for EUR, up from 1.08.

In the UK, the FTSE 100 Index tacked on 0.3% and the FTSE 250 Index climbed 2.8%. The British pound strengthened versus the US dollar, ending the week at USD 1.27 for GBP, up from 1.25.

Japan’s stock markets rose over the week. The TOPIX Index firmed 0.3% and the TOPIX Small Index added 0.5%. Shares were supported by the US Fed giving the clearest sign yet that it will pivot away from monetary policy tightening, as it held interest rates steady and projected more aggressive rate cuts in 2024. Yen strength posed a headwind for Japan’s exporters, however. MSCI Emerging Markets Index closed 2.7% higher, with a positive contribution to performance from the stock markets of Taiwan, India, South Korea and Brazil and a negative contribution from that of China. Chinese equities declined as persistent deflationary pressures weighed on the economic outlook. The Shanghai Stock Exchange Index retreated -0.9% and the blue-chip CSI 300 Index dropped -1.7%. In Hong Kong, the benchmark Hang Seng Index rallied 2.8% amid a global stock rally after the Fed kept interest rates steady on Wednesday and signalled it may start cutting them next year.

Last week, the Bloomberg Global Aggregate Index (hedged to USD) returned 1.7%, Bloomberg Global High Yield Index (hedged to USD) 2.0% and Bloomberg Emerging Markets Hard Currency Aggregate Index 2.3%.

Long-term US Treasury yields fell sharply on the inflation data and Fed signals, bringing the yield on the benchmark 10-year US Treasury note below 4% for the first time since the end of July. Over the week, the 10-year US Treasury yield decreased -32bp to 3.91% from 4.23%. The 2-year Treasury yield decreased -28bp to 4.45% from 4.72%. Over the week, the 10-year bund yield decreased -26bp, ending at 2.01% from 2.28%. The 10-year gilt yield decreased -36bp, to 3.68% from 4.04%. US investment-grade corporate bonds underperformed Treasuries before the Fed meeting on Wednesday. After the Fed’s dovish pivot, corporates outperformed in the risk-on environment. High yield corporate bonds also performed well in the wake of the meeting.


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