Global Stock Market Updates: Key Takeaways from Nov 27 to Dec 1, 2023

December 2, 2023 admin

Global Stock Market Weekly Analysis (27 Nov – 1 Dec 2023)

The global stock market indexes mostly closed higher during the week. The cooling inflation in the US and Europe, and fall in Treasury yields boosted the market sentiments, while Asian markets closed mixed during the week.

The US Stock Markets – Weekly Updates

The major US stock market indexes closed higher during the week, with the S&P 500 and Nasdaq index wrapping up their best monthly gain on Thursday since July 2020. The cooling inflation, dovish comments from Fed officials, and continuous fall in Treasury yields boosted the market sentiments in November.

On Thursday, the Commerce Department showed that the Fed’s preferred inflation measure Core Personal Consumption Expenditures (PCE) Price Index, rose 0.2% in October, a decline from the previous months and annually down to 3.5%, its lowest level since April 2021 but remains above Fed’s 2% target. The cooling PCE inflation cheered the investors and increased the hope of an interest rate cut in the spring of next year.

Several Fed officials expressed satisfaction with the inflation progress. Fed’s Board member Christopher Waller said last Tuesday that he is confident that the policy is at the right place to slow the economy and get back the inflation to set a target of 2%. He also added that the continuous decline in inflation would start reducing interest rates. His remarks lifted market sentiments during the week.

On Friday, Fed Chair Jerome Powell’s speech in Atlanta helped to boost the markets, as he acknowledged that interest rates were now “ well into restrictive territory”. Although, he pushed back investor’s expectations for aggressive interest rate cuts ahead, calling it too early to declare victory over inflation. Powell’s speech pushed the 10-year Treasury yields to 4.2% at its three-month low and boosted the stock price.

European Stock Market Indexes- Weekly Updates

European stock market indexes closed higher during the week, as a sharp fall in inflation and falling bond yields boosted investors’ sentiments. The Pan-European Stoxx 600 index ended higher by 1.35%, while major indexes CAC, DAX, and FTSE gained between 0.55% to 2.30% during the week.

The fresh data showed that the Eurozone consumer price growth in November slowed more than expected to 2.4% down from 2.9% in the previous month and below expectations for 2.7% according to the economists poll in FactSet. The core inflation excluding food and energy costs also dropped compared to the previous month.

The ECB policymaker signals some hawkish views saying this was not the time to start declaring victory” in the fight to curb inflation and it was too early to start talking about the rate cuts. Bank of England (BoE) Governor Andrew Bailey also pushed back against investor’s expectations for interest rate cuts and said “We are not in a place now where we can discuss cutting interest rates.”

Germany’s jobless rate came to a tick higher to 5.9% in November from 5.8% in the previous month, the highest level since 2021. Meanwhile, retail sales grew more than expected in October, gaining 1.1% sequentially, as cooling inflation lifted consumer confidence.

Asian Stock Markets Updates

The major Asian stock market indexes mostly closed lower this week. Indian stock markets closed higher for the fifth straight week, while Japan, China, and Hong Kong markets ended in the red. You can read about the Indian stock market updates here.

Japan Stock Market

Japan’s Nikkei ended slightly lower as investors preferred to book some profits after a rally in November. The expectation that the US interest rates had peaked, strong corporate earnings, stimulus measures, and weakness in the yen lifted investor’s sentiments in November.

Chinese Stock Market

China’s Shanghai index closed slightly lower during the week, as the economic data released during the week showed a mixed snapshot of China’s economy. The official manufacturing Purchasing Managers’ Index (PMI) fell below the expectation to 49.4 in November from 49.5 in October, marking the second consecutive monthly contraction.

Meanwhile, the private Caixin/S&P Global survey of manufacturing activity data came above the forecast of 50.7 in November from October’s 49.5, as new order growth was seen at the highest level since June.

Industrial profit increased by 2.7% in October compared to the same period last year but slowed from September’s 11.9% gain. A slowdown in industrial profits growth suggests a persistent weakness in parts of China’s economy.

However, the downside was limited as Beijing has issued a 25-point plan to set up financial support for the private sector in its latest effort to lift business confidence.

In Hong Kong, the Hang Seng Index closed sharply lower during the week.

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