Global Stock Market Snapshot: US and European Markets Rise, Asian Indexes Mixed

 

Global Stock Market Weekly Analysis (4 – 8 Dec 2023)

 

The global stock market indexes closed on a mixed note during the week. The economic data and crude oil prices were in focus this week. US and European markets ended higher while the major Asian closed mixed.

 

The US Stock Markets – Weekly Updates

 

A late rally helped the key US market indexes to finish the week on a higher note. The US equity benchmarks, Dow Jones, S&P 500, and Nasdaq composite ended higher during the week. Growth stocks extended their lead over value shares, as energy stocks lagged due to a fall in crude oil prices.

The announcement of the new launch of AI products by Google parent Alphabet and AMD also boosted the market sentiments and growth, and the tech-heavy index Nasdaq composite index rallied on Wednesday.

Investors were busy with job data to gauge the Fed’s next move on interest rate cuts. Friday’s much-awaited nonfarm payroll data surprisingly came higher, as employers added more than expected jobs in November, the unemployment rate fell, while average hourly earnings rose above expectations 

Meanwhile, Friday’s bigger surprise was survey data from the University of Michigan, which showed consumer sentiment in December jumped to its highest level since August due to a fall in inflation fear. Indicators reflecting consumer expectations and their assessment of current economic conditions also rose considerably.

The other economic data released during the week were mixed. The services activity in November modestly picked up in November, according to S&P Global and ISM data. The JOLT’s job opening data fell more than expected to its lowest level since March 2021. Monday’s factory orders also fell more than expected.

The 10-year US Treasury yields, after hitting an intraday low at 4.10% on Thursday, bounced back to 4.230% on Friday due to strong job data.

 

European Stock Market Indexes- Weekly Updates

 

The pan-European STOXX 600 index gained for the fourth consecutive week. The major indexes, CAC, DAX, and FTSE ended higher during the week. The market sentiments were optimistic on growing hope that the central bank could cut interest rates early next year due to slowing inflation and an indication of economic struggles in European Countries.

European Central Bank (ECB) executive board member Isabel Schnabel changed her stance to Dovish last week. In an interview with Reuters, she said, “The euro zone’s central bank could now take further rate hikes off the table and raised the possibility of a cut in mid-2024.” This motivated investors last week and raised hope for early interest rate cuts in Europe.

In Germany, the Industrial output declined for a fifth consecutive month in October as factory orders unexpectedly dropped. The unemployment rate also rose in November to its highest level since May 2021. The activity in the UK’s construction sector also dropped sharply for the third straight month due to a continued fall in homebuilding, according to a private report.

 

Asian Stock Markets Updates

 

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

 

Japan’s Stock Market

 

Japan’s stock market index, the Nikkei index fell sharply this week. The comments from Bank of Japan (BoJ) officials fueled speculation that the central bank might abandon its negative interest rate policy sooner than expected, placing downward pressure on riskier assets. Stocks fell sharply last week after Japan’s Q3 GDP revised downwards and contracted more than initially expected.  

 

Chinese Stock Market

 

China’s Shanghai Index fell during the week, as the sentiments were hit after Moody’s cut its outlook for China’s government bonds to “negative” from “stable” on Tuesday. The downgrade by the global credit agency marked the most recent challenge for financial markets in China, which is already struggling with a prolonged slowdown in the property market and diminishing confidence among both consumers and businesses.

The Caixin/S&P Global survey of services PMI data rose to an above expectation in November, while this contrasted with the prior week’s official nonmanufacturing Purchasing Managers’ Index (PMI), which showed contracted for the first time in 12 months.

 

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

 

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