Weekly market report: December 4, 2024
InsightDecember 4, 2024

Weekly market report: December 4, 2024

USA

The U.S. economy showed resilience, with the S&P 500 achieving its 54th record high of the year, rising 0.2%, and the Nasdaq Composite increasing by 1%. This performance was bolstered by strong showings in the technology sector, notably companies like Super Micro Computer, Microsoft, and Meta Platforms. Economic data showed a modest improvement in manufacturing activity, marking the first expansion in eight months. Investors are closely monitoring upcoming labor market reports and Federal Reserve communications for indications of future monetary policy adjustments. President-elect Donald Trump’s support for the U.S. dollar’s global reserve status and warnings to BRICS nations against promoting a rival currency strengthened the dollar, impacting global currency markets.

Europe

European equity markets faced challenges amid economic slowdowns and political uncertainties. The pan-European STOXX Europe 600 Index ended 1.06% higher, driven by expectations of potential monetary easing by the European Central Bank (ECB). Manufacturing activity contracted, with the eurozone’s PMI declining to 45.2 in November. Eurozone inflation eased to 3.1% year-over-year in November, down from 3.6% in October, largely due to falling energy prices. Preliminary Q3 GDP figures showed a marginal contraction of 0.1% quarter-over-quarter, reflecting weaker industrial production in Germany and France. Germany and France experienced downturns, while the UK saw its sharpest contraction in nine months. Political developments added to market volatility. In France, government budgetary disputes raised concerns about political stability, affecting the euro’s value.

Japan

Japanese equities declined, with the Nikkei 225 Index falling by 0.93% and the broader TOPIX Index down by 0.56%. Economic data showed mixed signals. Japan’s core inflation rate remained at 2.7% in October, reflecting steady price pressures despite falling energy costs. Q3 GDP growth was revised downward to an annualized 1.2%, driven by weaker-than-expected private consumption. The au Jibun Bank’s November flash PMI indicated a slight expansion in the services sector, while manufacturing output continued to decline. Bank of Japan Governor Kazuo Ueda expressed expectations of wage-driven inflationary pressures, suggesting potential future rate hikes. Export data revealed a 5% year-over-year decline in October, impacted by slowing global demand. Rising tensions in the Asia-Pacific region, particularly related to Taiwan, weighed on investor confidence and led to increased demand for safe-haven assets like the yen.

China

Chinese equities rose, with the Shanghai Composite Index gaining 1.81% and the blue-chip CSI 300 adding 1.32%. Optimism around government stimulus measures and stronger-than-expected economic data supported the market. Official Manufacturing PMI rose to 50.5 in November from 49.2 in October, signaling expansion for the first time in six months. Industrial production grew by 4.7% year-over-year in October, while retail sales expanded by 7.2%, highlighting strong domestic demand. The Consumer Price Index (CPI) remained flat in November, reflecting subdued price pressures. The Chinese government announced additional fiscal stimulus, including tax breaks for SMEs and infrastructure spending, to bolster economic activity. Exports rebounded sharply, driven by pre-tariff trade with the U.S. and ASEAN countries. U.S.-China trade negotiations showed modest progress, with both sides agreeing to delay tariff hikes, easing market concerns. Regional tensions, including developments in the South China Sea, added to geopolitical risks but had limited immediate impact on equity markets.Weekly market report: November 26, 2024

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