Welcome to the Weekly Market Roundup, your go-to source for the latest global market trends, key economic insights, and top financial news. Last week, financial markets navigated central bank decisions, inflation data, and sector-specific developments. Here’s a breakdown of the week’s key highlights and what lies ahead.
U.S. Markets: Nasdaq Shines Amid Broad Weakness
The Nasdaq Composite reached a milestone, crossing the 20,000 mark with modest gains fueled by tech stocks. Tesla surged 12%, while Alphabet climbed 8.4%—its best two-day run since 2015. However, other indices faltered, with the Dow dropping 814 points and the S&P 500 losing 39 points.
Economic updates painted a mixed picture:
Inflation: Headline and core CPI rose by 0.3% month-on-month, pushing annual inflation to 2.7%.
Labor Market: Weekly jobless claims hit a two-month high of 242,000, signaling a slowdown.
Federal Reserve: Futures markets priced in a 97% chance of a quarter-point rate cut at next week’s meeting.
Treasury Yields: The 10-year yield climbed to 4.4%, reflecting persistent inflation concerns.
Europe: ECB Eases, But Growth Worries Persist
European markets ended the week lower, with the STOXX Europe 600 slipping 0.77%. Germany’s DAX and Italy’s FTSE MIB managed slight gains, while the UK’s FTSE 100 dipped 0.10%.
Key developments:
The European Central Bank (ECB) cut its deposit rate to 3.0%, marking its fourth reduction this year.
The Swiss National Bank surprised markets with a 50-basis-point rate cut to combat deflationary pressures.
UK GDP contracted by 0.1% in October, weighed down by weak industrial production.
Political changes in France saw François Bayrou replace Michel Barnier as Prime Minister.
Japan: Yen Slides as January Rate Hike Beckons
Japanese equities gained, with the Nikkei 225 rising 0.97% and the TOPIX up 0.71%. A weaker yen, which fell to 153 per USD, bolstered market sentiment alongside expectations for a January rate hike by the Bank of Japan (BoJ).
Economic highlights:
GDP: Q3 growth exceeded forecasts, rising 0.3% quarter-on-quarter.
Business Sentiment: The BoJ’s Tankan survey indicated improved optimism among large manufacturers.
China: Muted Policy Moves Leave Investors Underwhelmed
Chinese markets saw losses, with the Shanghai Composite down 0.36% and the CSI 300 declining 1.01%. Investors were disappointed by vague details on fiscal measures discussed at the Central Economic Work Conference.
Economic indicators:
Inflation: November CPI remained subdued at 0.2% year-on-year.
Trade: Exports grew by 6.7% year-on-year, but imports fell, widening the trade surplus to $97.4 billion.
Industrial profits improved slightly but remain under pressure.
What to Watch This Week
As we approach the year’s end, several economic updates and central bank decisions will shape market sentiment:
Federal Reserve Meeting (December 18):
A widely anticipated quarter-point rate cut could signal the Fed’s policy trajectory for 2025.Eurozone Composite PMI (December 16):
Investors will assess whether ECB rate cuts are spurring growth, particularly in Germany and France.Bank of Japan Policy Statement (December 19):
Market speculation centers on a potential delay of the next rate hike until January.China’s Industrial Production and Retail Sales:
November’s data will reveal whether recent stimulus measures are stabilizing domestic demand.
Conclusion
Last week highlighted the delicate balance central banks must strike amid inflation pressures and slowing growth. With pivotal economic updates ahead, staying informed is key to navigating the evolving market landscape.
FAQs
What drove Nasdaq’s gains last week?
Strong performance by tech giants like Tesla and Alphabet fueled the Nasdaq’s rise, despite broader market weakness.Why did the ECB cut its deposit rate?
The ECB reduced rates to 3.0% to stimulate growth amid persistent economic challenges across the Eurozone.What caused Japan’s yen to weaken?
The yen weakened due to expectations of a January rate hike by the Bank of Japan and geopolitical pressures.Why are Chinese markets struggling despite fiscal measures?
Investors were underwhelmed by the lack of specifics in China’s announced fiscal support, combined with subdued inflation and trade data.What is the significance of the upcoming Fed meeting?
The December 18 meeting will provide crucial insights into the Federal Reserve’s approach to inflation and interest rates in 2025.
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