USA
The U.S. market saw mixed economic signals during the week. November’s job report revealed the creation of 227,000 non-farm jobs (forecast: 202,000), but unemployment rose slightly to 4.2% while labor force participation declined to 62.5%. Inflation concerns persisted as October job openings climbed to 7.7 million, exceeding expectations. ISM Services PMI dropped sharply to 52.1, reflecting weaker new orders and employment components. However, the University of Michigan Consumer Sentiment Index increased to 74, although inflation expectations for the next year rose to 2.9%. Federal Reserve Chair Jerome Powell’s optimistic remarks about economic resilience, coupled with a positive Beige Book indicating moderate business activity growth, buoyed equities. The S&P 500 posted gains, but treasuries and gold remained unchanged.
Europe
European markets showed a mixed performance, with the Eurozone experiencing varied PMI results—strong in Germany but weaker in France and Italy. Retail sales in the Eurozone fell slightly, reflecting subdued consumer demand, while comments from ECB and Bank of England leaders hinted at possible monetary easing. Germany’s DAX 40 index broke the 20,000 mark for the first time, driven by investor confidence, while political instability in France weighed on bond markets. Geopolitical risks, including the collapse of the Syrian regime, raised concerns about Europe’s energy supply and military involvement. Despite these challenges, European equities advanced, supported by optimism in Germany.
Japan
In Japan, the economy showed resilience with positive developments across multiple indicators. The Services PMI rose to 50.5, indicating expansion, while household spending in October grew by 2.9% m/m, signaling robust domestic demand. Revised Q3 GDP data surpassed expectations, reinforcing Japan’s recovery momentum. Market speculation about potential Bank of Japan policy changes added to investor optimism. The Nikkei 225 gained 1.91% during the week, benefiting from strong economic fundamentals and favorable export conditions due to a weaker yen.
China
China's economic data painted a mixed picture. The Services PMI declined to 51.5, reflecting slower growth in the services sector, while deflationary pressures persisted with the CPI falling to -0.6% m/m, reducing annual inflation to 0.2%. Geopolitically, China intensified trade tensions with the U.S. by imposing stricter export controls on key materials in response to Washington’s expanded export restrictions. These actions highlighted the escalating trade rivalry between the two nations. Despite these pressures, Chinese equities posted modest gains as investors weighed policy measures aimed at stabilizing the economy. The yuan remained stable, signaling market resilience amidst trade uncertainties.