Written by Rachel HU Xinyue
This week, the US stock market continued to rise, with the S&P 500 up by 1.74%, the Nasdaq rising by 1.65%, the Dow Jones up by 2.15%, and the Russell 2000 increasing by 1.4%. It is expected to mark the best performance in the first five trading days of a presidential term since President Reagan's inauguration in 1985. As Trump softened his rhetoric regarding tariffs, the US dollar weakened significantly against major currencies this week. The US Dollar Index posted its largest weekly drop since November 2023, while gold prices continued to rise, increasing from 2.740 to 2.777. Meanwhile, US Treasury bonds saw little price movement, with the 10-year bond yield almost unchanged compared to the previous week, following a sharp decline in recent weeks due to concerns that the new administration's agenda would increase government debt and push up inflation. On Tuesday, Trump announced the "Stargate" plan, which involves a $500 billion investment over the next four years to boost AI infrastructure, further fueling market optimism. Additionally, in his speech at Davos, Trump called for Saudi Arabia and OPEC to lower oil prices and to encourage the return of manufacturing to the US, which led to a sharp drop in oil prices, with WTI decreasing from 77.8 to 74.6. On Thursday, the U.S. Department of Labor released a report showing that as of January 18, the number of initial jobless claims in the U.S. increased by 6,000 from the previous week, marking the largest weekly increase in six weeks. Meanwhile, the number of continuing claims rose by 46,000 from the previous week, representing the largest increase since November 2021. On Friday, the National Association of Realtors released a report showing a 2.2% month-on-month increase in US existing home sales in December, marking the highest level since February 2024, highlighting a strong recovery in housing sales.
This week, nuclear energy stocks performed strongly, with NANO Nuclear Energy (NNE) rising by 80.13%, NuScale Power (SMR) up by 27.31%, and Oklo (OKLO), where Ortman serves as a director, increasing by 60.54%. Due to Trump's Stargate Plan, AI-related stocks surged, with Oracle's stock (ORCL) rising by 14%, NVIDIA (NVDA) increasing by 3.6%, and Arm (ARM) up by 8.9%.
Novo Nordisk (NVO) shares surged by 11.79% this week, as the latest clinical trial results showed that the company's weight-loss drug helped patients reduce 22% of their body weight over 36 weeks. Drone-related stock SES AI Corp (SES.US) soared by over 70% after signing a $10 million contract with two global OEM partners. Blockchain company Diginex (DGNX.US) triggered multiple circuit breakers, with its stock now up by 160.93%.
Written by Robin HONG Yee Ching
European equities extended gains on Thursday, with the STOXX 600 up 0.22% and the DAX rising 0.74% to another record high. Optimism surrounding Trump’s pro-growth policies and easing trade rhetoric buoyed sentiment, alongside strong corporate earnings. Siemens Energy surged 6.6% on favorable analyst commentary about AI-driven infrastructure demand, while Adidas gained 1.9% after upbeat results. UK’s FTSE 100 also neared record levels, supported by rising energy and industrial stocks. Investors are eyeing next week’s ECB meeting, where another rate cut is anticipated, and key macro data including Eurozone PMIs today.
The luxury sector is navigating a challenging landscape as it attempts to recover from recent downturns. Following a period of robust growth post-COVID, marked by double-digit increases, the industry now faces significant hurdles. Analysts predict a slow recovery in 2025, with major brands like LVMH, Kering, and Burberry expected to see modest sales growth of 3% to 4%. Factors such as a sluggish Chinese market, potential new tariffs in the U.S., and cautious consumer spending are contributing to this uncertainty. While some brands are adapting their strategies to retain high-net-worth customers and appeal to the middle class, the overall sentiment remains mixed as the sector grapples with shifting consumer preferences and economic pressures.
Novo Nordisk's shares jumped over 9% after announcing that its new drug, amycretin, resulted in a 22% weight loss for participants with obesity in a clinical trial. The trial involved 125 individuals averaging 93 kg and lasted 36 weeks. Unlike Wegovy, which it resembles, amycretin also targets the hormone amylin, which plays a role in hunger regulation.
Written by David LU Zhiyuanu
As January 2025 comes to an end, Chinese equities displayed mixed performance as markets approached the Chinese New Year. The SSE Composite Index decreased slightly by 0.19%, while the SZSE Component Index fell by 1.62%, with profit-taking in growth stocks continuing to weigh on sentiment. In contrast, the HSI increased by 0.34%, reflecting cautious optimism in Hong Kong's market as investors anticipated stronger economic policies from Beijing. Trading activity was influenced by seasonal factors, with consumer and travel-related sectors seeing some support ahead of the holiday. Looking forward, analysts expect the government to introduce more supportive measures to stabilize growth amid global uncertainties, while the holiday period is likely to bring subdued trading as investors await clearer signals on China's economic recovery.
Ice and snow economy: The release of ice and snow economy policies targets industry growth to 1.2 trillion yuan by 2027 and 1.5 trillion yuan by 2030, emphasizing winter sports, tourism, infrastructure, and equipment upgrades. These policies balance supply-side upgrades and demand-side incentives, promoting high-quality development. Functional apparel is a key beneficiary, with down jackets and outdoor apparel seeing strong sales in the winter season. The 2025 Asian Winter Games in Harbin, alongside recent tourism-boosting policies, is expected to sustain consumer enthusiasm and drive growth in key destinations and related industries. EV sector: New energy vehicle (EV) stocks showed resilience, supported by favorable policies aimed at boosting industry growth. Leading EV makers rose modestly, with BYD (1211.HK) gaining over 3%. On the policy front, recent announcements highlighted increased subsidies for EV purchases in rural areas and expanded support for charging infrastructure, aiming to accelerate EV adoption and promote green consumption. Analysts believe these measures, coupled with long-term goals for carbon neutrality, will strengthen the EV supply chain and drive sustainable growth. The focus on expanding charging networks and reducing ownership costs is expected to solidify consumer confidence and enhance the competitiveness of domestic EV manufacturers.
Zhongbai Group (SHE:000759) surged 54.42% last week, making it one of the top-performing stocks in the A-share market. The rally was driven by market speculation surrounding potential reforms in the retail sector and expectations of policy support for state-owned enterprises (SOEs). Analysts suggest the stock's sharp rise may also be linked to improved consumer sentiment and increased activity in the domestic retail market but caution against overheating due to speculative trading. Shanghai Phoenix (SHA:600679) dropped 30.51% last week, marking a significant decline in its stock price. The sharp decline may be attributed to profit-taking by investors after previous gains, as well as concerns over the company's growth prospects in a highly competitive e-bike market. Analysts suggest that the drop reflects market caution toward speculative trading, highlighting the need for sustained business performance to restore investor confidence.
Written by Dacian DENG Shen
Japan’s stock markets rose over the week, with the Nikkei 225 gaining 3.85% and the TOPIX Index up 2.67%, as Japanese exporters benefited from U.S. President Donald Trump’s decision not to impose new tariffs. However, yen strength, supported by government and Bank of Japan (BoJ) actions, posed a modest headwind. The yen appreciated to the high JPY 155 range against the USD. The BoJ raised its policy rate by 0.25 percentage points to 0.5%, the highest level since 2008, marking its third hike in a year. This move, along with an upward revision to inflation expectations for 2025, signals potential further rate increases later in the year. Japan’s core consumer price index rose 3.0% year-on-year in December 2024, exceeding the BoJ’s 2% target and supporting monetary policy normalization. The 10-year Japanese government bond yield also rose to 1.23%.
Japan’s largest banks, including MUFG, SMFG, and Mizuho, are nearing or surpassing key valuation levels for the first time in nearly a decade, as expectations rise that the Bank of Japan (BoJ) will increase interest rates and further normalize monetary policy. MUFG is now trading above its book value, while SMFG and Mizuho are at or close to this level, driven by the anticipated end of Japan's long-standing negative interest rate policy. Analysts predict that the average price-to-book ratio for the three megabanks could reach 1.1–1.2 by mid-2025. While megabanks benefit from improving market conditions and international expansion (e.g., MUFG generates over half its revenues abroad), smaller regional banks continue to trade at significantly lower valuations, reflecting persistent challenges.
Fuji Media Holdings is in crisis after allegations involving Masahiro Nakai, a former SMAP member and Fuji TV star, led 80 major advertisers, including Toyota and McDonald’s, to pull ads. Activist investors have criticized the company’s poor handling of the scandal, accusing it of governance failures and moral corruption. In response, Fuji Media announced an independent investigation, though its limited press access and muted response have drawn further backlash. Nakai denied allegations of violence but announced his retirement, while the company’s shares rose on speculation of asset sales and management changes. The scandal has reignited concerns about harassment in Japan’s media industry and could have lasting financial impacts despite limited short-term effects. Analysts warn advertisers may not renew contracts, and investors see the crisis as a chance to push for governance reforms. Fuji Media’s significant assets, including real estate and stock holdings, remain undervalued, with shareholders calling for management changes to unlock potential value.
Written by Kevin XIA Yunchu
The Indian stock market experienced notable volatility this week. The benchmark indices, Sensex and Nifty 50, faced significant declines, closing at 76,330.01 (-1.36%) and 23,085.95 (-1.47%) respectively. Financial sectors were hit the hardest, especially with investors winding up positions due to the last day of FaO expiry. Analysts attribute the market downturn to reactions ahead of the Federal Open Market Committee (FOMC) meeting in the US and budget announcements in India.
IT and Technology: The technology sector remained resilient despite the broader market turbulence. A number of IT companies, including TCS and Infosys, reported strong earnings, which somewhat helped buffer the negative sentiment across the market. Oil & Gas: The oil and gas sector was under pressure this week. This stemmed from global events, including US announcements to boost crude output, leading to Brent crude prices settling at $78 per barrel, a 4% drop over 5 days. Banking and Finance: The banking sector experienced considerable selling pressure. Stocks of India's major banks likenICICI Bank and HDFC Bank were particularly impacted, with the sector index dropping by 1.42%.
Adani Enterprises: An FPO announcement led to significant movement in Adani Enterprises' stock, which saw a decline of 6.29%. Investors remained cautious, leading to considerable offloading of positions. Wipro and Tanla Platforms: Several stocks, including Wipro and Tanla Platforms, are set to trade ex-dividend next week. This captures the interest of long-term investors looking for dividends.
Written by Rachel HU Xinyue
This week, the U.S. stock market opened on a weak note, with all three major indices closing the week down by more than 1.5%. The Dow Jones Industrial Average dropped 1.88%, the S&P 500 fell 1.95%, and the Nasdaq Composite declined 2.34%. Labor market data remained robust, with initial jobless claims for the week ending January 4 declining by 10,000 to 201,000—the lowest level in 11 months. In the energy sector, U.S. crude oil inventories decreased by 959,000 barrels, while gasoline and distillate stocks increased by 6.33 million barrels, leading to weekly price increases of 3.59% and 3.69% for WTI and Brent crude, respectively. Despite positive labor and energy market developments, consumer confidence weakened. The University of Michigan Consumer Sentiment Index fell from 74 in November to 73.23 in December, below expectations of 73.8, reflecting lingering concerns over future inflation despite an easing in perceptions of current living costs. In addition, the unemployment rate in December decreased from 4.2% to 4.1%, better than market forecasts. Non-farm payrolls increased by 256,000, marking the largest gain in nine months, with retail contributing 43,000 new jobs. Strong labor market performance dampened investor expectations for another Federal Reserve rate cut within the next six months.
Among the 11 sectors of the S&P 500 Index, only one ended the week in positive territory, with the financials, real estate, and technology sectors leading the declines. Insurance stocks experienced significant losses this week due to forecasts of wildfire damages in California reaching $20 billion. Mercury General Corporation (MCY) saw its stock price drop 24% this week, The Allstate Corporation (ALL) fell by 5.64%, and The Travelers Companies, Inc. (TRV) declined by 4.26%. However, it is anticipated that insurance companies may have brighter prospects in the long term after overcoming this short-term setback. The technology sector led the losses this week. Semiconductor stocks plummeted as the Biden administration prepared to impose a new round of restrictions on AI chip exports. Nvidia closed down 5.76%, AMD declined by 4.76%, and NXP Semiconductors ended the week 5.1% lower. Apple dropped 2.41%, likely due to concerns over 2025 shipment projections falling short of market expectations.
Walgreens Boots Alliance, Inc. (NASDAQ: WBA) saw its stock rise by 28% to $11.82 after reporting first-quarter financial results that exceeded market expectations. IGM Biosciences Inc. (NASDAQ: IGMS) experienced a significant decline of 66%, with its stock falling to $2.1250 following the company's announcement to discontinue further development of Imvotamab and IGM-2644.
Written by Robin HONG Yee Ching
The STOXX 50 and STOXX 600 fell nearly 1% on Friday, driven lower by astronger-than-expected U.S. jobs report that reinforced the Federal Reserve's cautious stance on future rate cuts. This, combined with inflation concerns, the ongoing UK debt market crisis, and uncertainty over President-elect Trump's potential tariff policies, weighed heavily on investor sentiment. Most sectors and bourses were in the red, with utilities and food & beverage stocks dropping 2.3%, while autos were the exception, rising 0.48%.
The banking sector was buoyed by UBS shares, which surged nearly 10% week on week to a 16-year high following a Wall Street Journal report that the bank would be fined hundreds of millions in a settlement with the US Justice Department. The case is related to Credit Suisse, which was investigated for violating a plea agreement involving assistance to US taxpayers in filing false income tax returns.
Marks and Spencer’s on Thursday said like-for-like food sales rose 8.9% in the 13 weeks to the end of December, while clothing, home and beauty added 1.9% over the same period. “This was another good Christmas for M&S,” chief executive Stuart Machin said in a statement. “Sales records were broken across the business, with Food recording its biggest day and Clothing, Home & Beauty online its biggest week, but we’re not complacent — as a growth business it’s our job to break records.” The external environment however would remain challenging, Machin warned, pointing to cost and economic headwinds, but also noted that there was much in the group’s control.
Written by Kevin XIA Yunchu
China's Central Economic Work Conference (CEWC) concluded on January 9, 2025, with policymakers emphasizing proactive policy support to bolster consumption and stabilize housing and stock markets. The conference highlighted the need for a higher fiscal deficit and moderately loose monetary policy to address economic challenges. Despite these measures, China's retail sales softened to 3.0% year-on-year growth in December, while industrial production rose by 5.4% year-on-year. The Producer Price Index (PPI) inflation rose to -2.5% year-on-year, indicating a demand pick-up for industrial products. In Hong Kong SAR, the Hang Seng Index fell by 1.83% in its final hour of trade on January 13, 2025, while the CSI 300 Index in mainland China lost 2.37% and ended at 3,933.18. The decline was attributed to Beijing's stimulus pledges falling short of investor expectations.
The technology sector in Hong Kong SAR saw significant movements, driven by the listing of several sizeable deals, including four of the ten largest IPOs in the past three years. These listings included Specialist Technology Companies under Chapter 18C, primarily engaged in Al and robotics. This influx of tech IPOs has reinforced Hong Kong's position as a hub for innovation and contributed to a 78% increase in funds raised compared to 2023.
In mainland China, BYD Company Ltd (SZ: 002594)., a leading electric vehicle manufacturer, experienced a notable surge in its stock price following reports of increased production targets and expansion plans. The company's shares rose by 7.5% over the week, reflecting investor optimism about its growth prospects. In Hong Kong SAR, Mao Geping (HK: 01318), a Chinese cosmetics firm, made a spectacular debut on the stock market. The company's shares surged by 70% on the first day of trading, reaching HK$53.05 at its peak. The IPO was highly popular, with retail investors oversubscribing the shares 918 times. This strong performance highlights the growing interest in premium beauty products and the company's successful market entry.
Written by Dacian DENG Shen
Japan's stock markets declined over the week, with the Nikkei 225 Index dropping 1.8% and the TOPIX Index falling 2.5%. Speculation persisted about the timing of the Bank of Japan’s (BoJ) next interest rate hike. The yen weakened against the U.S. dollar due to uncertainty surrounding BoJ’s monetary policy normalization and the widening U.S.-Japan interest rate differential. Japan's Finance Minister issued a warning against speculative currency moves, signaling potential intervention. In fixed income, the 10-year Japanese government bond (JGB) yield rose to 1.19%, the highest since 2011, driven by higher U.S. Treasury yields and reduced expectations of Federal Reserve rate cuts. The BoJ maintained a tightening bias, but recent comments suggest the likelihood of a January rate hike is low, with some investors predicting delays until March or April. Meanwhile, Japan’s real wage growth declined for the fourth consecutive month in November, falling 0.3% year-on-year. The BoJ remains focused on economic and price developments, along with wage growth, to determine future rate hikes.
Retail Sector: Seven & i Holdings <3382> increased by 0.12%. Fast Retailing <9983>, whose operating profit for the September-November 2024 period, announced the previous day, fell short of market expectations, causing its stock to plunge nearly 8% at one point. The sharp drop in Fast Retailing worsened investor sentiment, dragging the Nikkei 225 down by over 300 points alone.
Technology Sector: Advantest <6857> increased by 12.85%. NTT Data <9613> decreased by 0.76%. TDK <6762> decreased by 8.56%.
KKR has urged the board of Fuji Soft <9749> to take legal action against Bain Capital, accusing its rival of violating a non-disclosure agreement in their $4 billion bid for the Japanese software company. KKR's call for an injunction escalates the public battle between the two private equity firms, a rare occurrence in Japan. Bain launched a $4.3 billion counterbid in December, positioning itself as a "white knight" with the support of Fuji Soft's founder, despite the board repeatedly backing KKR's lower bid due to fears of a potential deadlock and concerns about Bain's higher bid timeline. KKR also accused Bain of misusing confidential information and misleading the market, while Bain argued it had destroyed all required data and would proceed with its offer based on public information. Fuji Soft's shares rose above Bain's offer price, leading analysts to speculate on the possibility of higher bids.
Written by Justin CHUNG Lok Yin
This week, the Indian stock market experienced a significant downturn. The NIFTY 50 Index declined by 2.49%, and the SENSEX Index dropped by 2.2%. Investor confidence in the Indian market remained weak. The closing of global markets at lower levels this week set the stage for declines in major Asian markets. An increased expectation that the U.S. Federal Reserve will maintain its current interest rate has strengthened the U.S. dollar and raised bond yields, adversely affecting global market performances. If the Fed decides to hold rates in January, the Reserve Bank of India may be more inclined to hold rates in February, which could further impact market performances. Amid ongoing uncertainties, foreign portfolio investors (FPIs) have divested over ₹8,500 crore from Indian equities in January. Persistent foreign capital outflows remain a key factor in the depressed Indian stock market. India's economy is projected to grow by 6.4% in the fiscal year ending in March 2025, marking the slowest growth since the COVID-impacted fiscal year of 2020/21 and a decline from the 8.2% growth of the previous year. This figure also falls short of the government's earlier forecast of 6.5%. The slowdown is primarily attributed to weaker growth in gross fixed capital formation and inventories, despite accelerated spending by the private sector (7.3% compared to 4%) and the government (4.1% compared to 2.5%). Additionally, exports grew at a faster rate (5.9% compared to 2.6%), while imports contracted (-1.3% compared to 10.9%). On the production side, manufacturing growth is expected to slow significantly (5.3% compared to 9.9%), while growth in other major GDP contributors such as trade and hotels (5.8% compared to 6.4%) and financial services and real estate (7.3% compared to 8.4%) also moderated, offset by a stronger performance in agriculture (3.8% compared to 1.4%).
Auto: The Federation of Automobile Dealers Associations (FADA) reported that auto retail grew by 9.1% year-on-year in 2024 despite challenges such as extreme weather, elections, and uneven monsoons. However, the data for December was disappointing, as overall retail declined by 12.4%, with almost all segments showing degrowth. In December, two-wheeler retails were affected by low cash flow, poor sentiment, delayed harvest payments, and heightened competition from electric vehicles, while the passenger vehicle segment saw degrowth due to high post-festive inventory, aggressive discounting, and limited new launches, with many buyers deferring purchases until January.
Tata Consultancy Services Ltd (NSE: TCS): The company gained 5.6% on January 10, Friday, culminating in a net 3.35% gain for the week. The largest IT firm in India announced positive results for the October to December quarter on January 9, Thursday, reporting a 12% rise in net profit to ₹12,380 crore for the third quarter of the fiscal year 2024-25, compared to ₹11,058 crore in the previous year.
Written by Rachel HU Xinyue
The U.S. stock market remained stable this week, influenced by the Christmas holiday and a sell-off in tech stocks on Friday. The Dow rose 0.35%, the S&P 500 increased by 0.67%, and the NASDAQ gained 0.74%. However, the market experienced significant outflows, with investors withdrawing over $35 billion—marking the largest outflow since December 2022—following a record $62 billion inflow the previous week. After last week's 25bp Fed rate cut, expectations for further rate reductions next year have declined. The probability of the Fed holding rates steady in January is now 91.4%, with an 8.6% chance of a 25bp cut. This has pushed U.S. Treasury yields higher, with the benchmark 10-year yield reaching 4.627%, its highest since May.
The U.S. Census Bureau reported a 1.1% decline in durable goods orders in November, well below the forecasted 0.4% drop. However, core capital goods orders (excluding aircraft and defence) rose 0.7%, the largest increase since July 2023. Consumer confidence also weakened, with the Conference Board's index falling from 112.8 to 104.7. Meanwhile, new home sales rose 5.9% MoM in November, recovering from a 14.8% drop in October but falling short of the expected 9.8% increase. The growth was likely driven by delayed transactions due to earlier hurricanes and a 14-year high in new home supply. Labor market data remained strong, with initial jobless claims falling by 1,000 to 219,000 in mid-December, below the expected 224,000. This marks the lowest level since the 213,000 recorded a month ago. In energy markets, U.S. crude oil inventories fell by 3.2 million barrels last week, following a 4.7 million-barrel drop the previous week. The tightened supply pushed crude oil and Brent prices up by 1.41% and 1.24%, respectively, for the week.
Quantum computing-related stocks surged, setting the stage for a robust year-end rebound in the emerging sector. Rigetti Computing Inc. soared by 86%, while SEALSQ Corp skyrocketed over 230.18%. Meanwhile, the electric vehicle sector continued its upward trend, with Toyota Motor Corp. rising 11.98% and Li Auto Inc. climbing 8.19%. However, heavy sell-offs in major tech companies on Friday weighed on Wall Street. Tesla dropped 4.9%, NVIDIA fell 2%, and Broadcom declined 3.05%. Thin holiday trading amplified market volatility, leading the Nasdaq 100 to fall 1.3% and the Dow Jones Industrial Average to drop 333 points on that day
Honda Motor Co. Ltd. (NYSE: HMC) experienced a significant stock increase of 20.39% this week, following the announcement of formal merger talks with Nissan Motor Co. This potential merger aims to create the world's third-largest automaker, enhancing competitiveness in the evolving electric vehicle market.
Written by Robin HONG Yee Ching
European stocks recorded their first weekly gain in three weeks, with the Stoxx Europe 600 Index rising by 0.7% as trading resumed after Christmas. This increase was notable despite thin trading volumes during the holiday period, with strong performances observed in the automotive, banking, and financial sectors, while retailers lagged behind. The index has encountered challenges throughout the fourth quarter, experiencing an overall 3% decline primarily due to concerns surrounding regional political uncertainties and potential US tariffs under President-elect Donald Trump. France's CAC 40 underperformed with a decline of approximately 2.5% for the year, while Germany's DAX led gains with an increase of over 15%, excluding dividends. In the banking sector, M&A activity surged in 2024, with deals surpassing $41.5 billion, marking the busiest year for European banks since 2020. This heightened deal-making activity has contributed to a total return of 32% for bank stocks in 2024, reflecting robust investor confidence.
The banking sector has emerged as a prominent player in European M&A activities, representing 17% of total deals this year. This resurgence can be attributed to depressed valuations across industries, with European bank shares trading at a historic 40% discount compared to their US counterparts. Motivated by the need to achieve scale, reduce costs, and prepare for a potential decline in interest rates, the sector is actively pursuing growth. In contrast, the automotive sector is encountering challenges due to proposed tariffs by President-elect Donald Trump, impacting major manufacturers such as V olkswagen and BMW, who are already grappling with sluggish demand in China. Additionally, the telecom sector is experiencing increased deal-making activity, aided by regulatory changes that are facilitating mergers and acquisitions.
Delivery Hero SE witnessed a significant 9% drop in its stock value after Taiwan's Fair Trade Commission blocked Uber Technologies Inc.'s planned $950 million acquisition of its Foodpanda business on antitrust grounds. This decision had a notable impact on Delivery Hero, which had intended to utilize the sale proceeds to bolster its financial position amidst ongoing restructuring efforts prompted by activist investor pressures. In contrast, Banca Monte Dei Paschi di Siena SpA has seen its stock price more than double following Italy's initiatives to privatize the bank and establish a new national banking leader, signifying a remarkable turnaround after years of decline for the world's oldest financial institution. Unicredit SpA is also in the spotlight for acquiring a stake in Commerzbank AG and pursuing additional opportunities for domestic consolidation.
Written by David LU Zhiyuan
Chinese equities showed mixed performance but relatively small fluctuations in the final week of 2024, with the SSE Composite Index rising 1.60%, while the SZSE Component Index declined slightly by 0.33%. The HSI gained 1.90%, reflecting positive sentiment in the Hong Kong market. Investors remained cautious amid year-end trading, balancing optimism over domestic economic recovery with concerns about external uncertainties. Gains in the SSE were supported by stronger-than-expected retail and industrial data, while declines in the SZSE were driven by profit-taking in growth stocks. The Chinese government is expected to implement more supportive measures in 2025 to stabilize growth, as analysts suggest current policies may need to adapt to global economic challenges.
New energy vehicle (EV) stocks showed resilience, supported by favorable policies aimed at boosting industry growth. Leading EV makers rose modestly, with BYD (1211.HK) gaining over 3%. On the policy front, recent announcements highlighted increased subsidies for EV purchases in rural areas and expanded support for charging infrastructure, aiming to accelerate EV adoption and promote green consumption. Analysts believe these measures, coupled with long-term goals for carbon neutrality, will strengthen the EV supply chain and drive sustainable growth. The focus on expanding charging networks and reducing ownership costs is expected to solidify consumer confidence and enhance the competitiveness of domestic EV manufacturers.
Zhongbai Group (SHE:000759) surged 54.42% last week, making it one of the top-performing stocks in the A-share market. The rally was driven by market speculation surrounding potential reforms in the retail sector and expectations of policy support for state-owned enterprises (SOEs). Analysts suggest the stock's sharp rise may also be linked to improved consumer sentiment and increased activity in the domestic retail market but caution against overheating due to speculative trading. Shanghai Phoenix (SHA:600679) dropped 30.51% last week, marking a significant decline in its stock price. The sharp decline may be attributed to profit-taking by investors after previous gains, as well as concerns over the company's growth prospects in a highly competitive e-bike market. Analysts suggest that the drop reflects market caution toward speculative trading, highlighting the need for sustained business performance to restore investor confidence.
Written by Dacian DENG Shen
Japan's stock markets rose significantly over the week, with the Nikkei 225 gaining 4.08% and the TOPIX Index up 3.69%, supported by a weaker yen that bolstered export-heavy industries. The yen declined to JPY 157 against the U.S. dollar, and 10-year Japanese government bond yields rose to a five-week high of 1.1%. Bank of Japan (BoJ) Governor Kazuo Ueda suggested potential interest rate hikes if economic conditions improve, emphasizing a cautious approach to ensure inflation stays near the 2% target while keeping policy accommodative. Tokyo's December inflation rose above expectations, with the CPI up 3% year-on-year and core CPI rising 2.4%, indicating potential national trends. Economic data for November showed mixed results: industrial production fell 2.3% but outperformed expectations, retail sales rose 1.8%, and unemployment remained steady at 2.5%.
TSMC has begun mass production at its new fab in Kumamoto, Japan, marking a milestone in advanced chip manufacturing in the country. Operated by Japan Advanced Semiconductor Manufacturing (JASM), the plant uses 40nm, 28nm, 22nm, 16nm, and 12nm-class process technologies, with a focus on automotive and consumer electronics applications. This facility represents the first production of FinFET logic chips in Japan and can handle up to 55,000 wafer starts per month. Supported by a $3 billion subsidy from the Japanese government, the $8.27 billion investment involves TSMC (holding an 86.5% stake), Sony, Denso, and Toyota. Plans for a second fab at the site are set for 2025, targeting 6nm and 7nm-class nodes, with operations expected by 2027. Combined, the two fabs aim for a capacity of over 100,000 wafers per month, with total investments reaching $20 billion. TSMC's expansion in Japan follows its moves into the U.S. and Germany. Additional plans for a third fab in Kumamoto depend on the success of the first two, as well as solutions for infrastructure and environmental challenges.
Honda and Nissan plan to merge to counter competition from China's growing electric vehicle (EV) industry, aiming to solidify their market position by 2030. The merger would include Mitsubishi, enabling resource sharing among the three companies to compete with EV leaders like Tesla and BYD. The partnership aims to combat China's dominance in EV production, which benefits from lower costs and government subsidies. Nissan and Honda’s combined sales exceed $191 billion, and their leaders emphasize the urgency of building competitive capabilities. However, the merger's success depends on Nissan's financial recovery. Nissan has faced declining sales and reputational challenges, including fallout from the arrest of former CEO Carlos Ghosn. Political scrutiny in Japan and potential job cuts are anticipated, as is the likely end of Nissan's alliance with Renault. The companies have already deepened their cooperation in EV technologies, focusing on batteries and related advancements.
Written by Justin CHUNG Lok Yin
Following the crash last week, the Indian stock market was stagnant in the Christmas week. The Sensex benchmark rose 0.24% as the NIFTY 50 rose 0.4%, both ended nearly flat on a subdued note. This reflects investors’ cautious sentiments as the year wraps up. The Indian market lacked major triggers this week while the Indian rupee kept falling to historical lows against the dollar. The rupee ended at a fresh record low of 85.54 per dollar on December 27, Friday, due to a strong greenback amid surging month-end demand from banks and importers. Looking at the global market, investors are prudently observing the US Republican Party administration starting next month.
The Nifty Pharma Index rose 1.85%. The outperformance of the Pharma Index could be explained from a technical perspective. On December 26, Thursday, the 9-day moving average broke the 50-day and 100-day moving averages. A symmetrical triangle pattern established last Friday also broke out at the same time, stimulating a 2% rise within 24 hours. The Nifty Auto Index rose 1.7%. A possible explanation is the official commencement of the merger talk between Japanese auto giants Honda, Nissan, and Mitsubishi on December 23, Monday. The Indian auto market from now on pays more attention to how Indian car companies, factories, and supply chains can capitalise on such synergies.
Hindustan Aeronautics Ltd (NSE: HAL): Hindustan Aeronautics, one of the largest Indian defence stocks, rose 1.33% in the week. Analysts are confident in the stock despite a 20% downfall in 6 months. On December 24, Tuesday, Phillip Securities initiated coverage of the company with a buy rating and a price target of INR 5,500. On December 27, Friday, Antique Stock Broking selected the stock as one of its top picks in the defence sector. Hindustan is credited based on its extensive experience and evolving capabilities in the aerospace and defence sectors, which fuels its robust earnings trajectory in 2025. Favourable policies also provide a strong growth outlook for Hindustan. To enhance operational readiness, the Indian Defence Acquisition Council (DAC) has approved Acceptance of Necessity (AoN) proposals worth Rs 4.4 trillion in 2024, a 29% Y oY increase over 2023’s Rs 3.5 trillion. Notably, 94% of these approvals will benefit domestic companies, including Defence Public Sector Undertakings (DPSUs) like Hindustan.
Written by Rachel HU Xinyue
This week, U.S. equity markets exhibited mixed performance, reflecting underlying market uncertainties. The S&P 500 declined by 0.64%, the Dow Jones Industrial Average by 1.82%, while the NASDAQ advanced by 0.34%, and the Russell 2000 contracted by 2.58%. The U.S. labor market demonstrated notable softness this week, as initial unemployment claims increased to 242,000, exceeding the projected 220,000 and marking the highest level observed in two months. And the US Dollar Index increased by approximately 1%, driven by rate cut policies implemented in several countries, including Canada and Switzerland, which contributed to the strengthening of the US dollar. According to the latest report, the November CPI stood at 2.7%, largely in line with expectations, while the PPI reached 3% compared to the forecast of 2.6%. These figures further support the case for rate cuts, with traders raising the probability of a 25 basis point rate cut in December to 99%, according to the CME Group’s FedWatch measure.
This week, tech stocks performed strongly, with the seven trillion-dollar tech companies adding roughly $416 billion in market cap on Wednesday. The tech megacaps lifted the NASDAQ past 20,000 for the first time. Amazon, Apple, and Meta have all been regularly reaching new highs. Since Trump’s victory, the market has been on the rise, as people believe the new administration will ease market regulations. On Tuesday, Trump named Andrew Ferguson, known for his support of innovation, as the next chair of the Federal Trade Commission, replacing Lina Khan, which further boosted market sentiment. At the same time, the increasing possibility of interest rate cuts could lead to a rise in large tech stocks.
Alphabet Inc. (GOOG:NASDAQ): Alphabet unveiled its latest quantum computing chip on Monday, described as a “breakthrough” and “an important step in our journey to build a useful quantum computer with practical applications.” This announcement led to an 11% surge in the company’s stock price on Tuesday and Wednesday, surpassing its previous record of 191.18$. Broadcom Inc.(A VGO:NASDAQ): Broadcom released its fourth-quarter earnings report on Thursday, showing a strong 51% year-over-year growth. The company stated that its AI revenue increased by 200% this year and that it is working with major cloud clients to develop customized AI chips. As a result, Broadcom's stock surged over 21% to $220 on Friday morning, with its market capitalization surpassing $1 trillion for the first time. NVIDIA Corp(NVDA:NASDAQ): Nvidia's stock declined by 2.6% on Monday, primarily due to allegations of potential violations of China's antimonopoly law, with the State Administration for Market Regulation conducting an investigation into Nvidia's acquisition of Mellanox. Although the stock experienced a rebound afterward, it ultimately closed the week down by 2.25% relative to the previous week.
Written by Robin HONG Yee Ching
The economic landscape in Europe remains clouded by political instability and sluggish growth, particularly in major economies like France and Germany. These factors have contributed to one of the worst annual performances for European stocks compared to the S&P 500, which has surged by 27% this year, driven by strong demand for large-cap stocks and advancements in artificial intelligence. The European Central Bank (ECB) has also adopted a dovish stance, cutting interest rates to stimulate the economy in anticipation of potential disruptions from Donald Trump's return to office.
Despite the overall pessimism, some strategists maintain a cautiously optimistic outlook for specific sectors. Citigroup and Deutsche Bank are among the most bullish, projecting gains of 10% and 13%, respectively, for the Stoxx 600. This optimism is based on expectations of solid corporate earnings growth, which is projected at 8% for Europe in 2025. However, concerns persist regarding the sustainability of this growth amid a projected eurozone GDP growth of only 1.1%.
Individual companies within the European market show varied performance expectations. While Deutsche Bank AG is currently trading at €17.03 with a slight increase of 0.66%, analysts caution that broader market conditions could lead to declines for weaker firms. UBS Group AG and TFS Derivatives have issued bearish forecasts for the Stoxx 600, predicting a drop to around 470 points due to anticipated declines in sales and margins.
Written by Kevin XIA Yunchu
China's Central Economic Work Conference (CEWC) concluded on December 12, 2024, with policymakers emphasizing proactive policy support to bolster consumption and stabilize housing and stock markets. The conference highlighted the need for a higher fiscal deficit and moderately loose monetary policy to address economic challenges. Despite these measures, China's retail sales softened to 3.0% year-on-year growth in November, while industrial production rose by 5.4% year-on-year. The Producer Price Index (PPI) inflation rose to -2.5% year-on-year, indicating a demand pick-up for industrial products.
In Hong Kong, the Hang Seng Index fell by 1.83% in its final hour of trade on December 13, 2024, while the CSI 300 Index in mainland China lost 2.37% and ended at 3,933.18. The decline was attributed to Beijing's stimulus pledges falling short of investor expectations.
The technology sector in Hong Kong saw significant movements, driven by the listing of several sizeable deals, including four of the ten largest IPOs in the past three years. These listings included Specialist Technology Companies under Chapter 18C, primarily engaged in Al and robotics. This influx of tech IPOs has reinforced Hong Kong's position as a hub for innovation and contributed to a 78% increase in funds raised compared to 2023.
In mainland China, BYD Company Ltd., a leading electric vehicle manufacturer, experienced a notable surge in its stock price following reports of increased production targets and expansion plans. The company's shares rose by 7.5% over the week, reflecting investor optimism about its growth prospects.
In Hong Kong SAR, Mao Geping, a Chinese cosmetics firm, made a spectacular debut on the stock market. The company's shares surged by 70% on the first day of trading, reaching HK$53.05 at its peak. The IPO was highly popular, with retail investors oversubscribing the shares 918 times. This strong performance highlights the growing interest in premium beauty products and the company's successful market entry.
Written by Dacian DENG Shen
Japan's stock markets posted modest gains over the week, with the Nikkei 225 Index rising by 0.97% and the TOPIX Index gaining 0.71%. Market sentiment was bolstered by China’s announcement of proactive fiscal measures and moderately looser monetary policy.
Domestically, speculation increased that the Bank of Japan (BoJ) may delay an interest rate hike at its December 18–19 meeting, causing the yen to weaken to the mid-JPY 153 range against the USD, compared to the previous week’s 150. Meanwhile, the yield on 10-year Japanese government bonds declined to around 1.04% from 1.06%.
Investor sentiment now leans toward the BoJ implementing a 25-basis-point rate hike at its January meeting instead of December. This shift is likely due to the additional economic data the BoJ would receive by waiting, including two more inflation prints, the quarterly economic report, and feedback from its regional manager meeting. The BoJ has emphasized that any rate hike will depend on meeting its projections for economic growth, inflation, and wage increases.
Japan's final GDP data revealed 0.3% quarterly growth in Q3, surpassing the 0.2% consensus estimate. Additionally, the BoJ’s Tankan survey showed improved sentiment among large manufacturers in Q4, with optimism about business conditions outweighing pessimism.
The US Treasury has warned that the Committee on Foreign Investment in the United States (Cfius) cannot agree on mitigating security concerns over Japan’s proposed $15 billion acquisition of US Steel, likely leading President Biden to block the deal. While some US agencies see no risks, opposition led by the trade representative persists, citing political motives. This dispute strains US-Japan relations, with Japan criticizing Washington for labeling its steel industry a security risk while seeking cooperation against China. Critics argue this politicizes Cfius and harms the US-Japan alliance.
Socionext Inc. (6526.T) With the growth of generative AI, the rise of AI ASICs is drawing attention as a potential alternative to NVIDIA ’s GPUs. Morgan Stanley’s recent report predicts the AI ASIC market will grow from $12 billion in 2024 to $30 billion by 2027, driven by cost and performance advantages. While NVIDIA (NVDA.US) remains dominant in training large language models, Socionext Inc. (6526.T) is well-positioned to benefit from the expanding adoption of AI ASICs. Morgan Stanley highlights that GPUs and ASICs are likely to coexist, serving different needs in the AI ecosystem.
Written by Justin CHUNG Lok Yin
The Indian rupee fell to an all-time low of 84.88 against the dollar on December 12, Thursday. While the Indian macro environment stays strong, outflow pressures persist due to the optimistic sentiments towards the US. The dollar/rupee non-deliverable forward (NDF) rates rose during the week, creating an arbitrage opportunity between the offshore NDF market and the onshore market. To exploit the arbitrage, banks have been buying dollars in the near-term onshore forward market. This activity has pushed the 1-month dollar/rupee forward premium to spike above 2.5%, a level that rarely exceeds the 1-year yield. This has further pressurized the rupee and fueled the historical low.
Market rebounded before market closing on Friday, potentially due to a positive CPI release on December 12, Thursday. Y oY retail inflation eased to 5.48% in November, down from 6.21% in October. This marks the first drop since July 2024. This cooling inflation has raised expectations of a rate cut by the Reserve Bank of India in the next monetary policy meeting. Despite the stock market recovery, the market breadth remained weak, with more stocks declining (2,173) than advancing (1,818).
The Nifty Auto Index fell by 0.44% during the week. On December 9, Monday, data from Federation of Automobile Dealers Associations of India (FADA) revealed that passenger vehicle (PV) sales fell sharply by 33% MoM and 14% Y oY in November 2024. While November was initially expected to build on its prior momentum, particularly due to the marriage season, dealer feedback suggests that this segment underperformed overall expectations. The fast-moving consumer goods (FMCG) sector also seems to slow down. The Nifty FMCG Index bottomed out at 55,442.60 on Friday, December 13, hitting a six-month low after falling 16% since late September. This decline reflects tepid sales reported by FMCG companies. Executives from leading FMCG companies attribute the slowdown in urban areas to multiple factors such as rising urban real estate costs, food inflation, and slower wage growth, which fell to 7.7% Y oY in Q3 from 14.2% a year ago. These challenges strained middle-class spending power.
Bharti Airtel Ltd (NSE: BHARTIARTL): On December 13, Friday, Bharti Airtel’s shares surged by 4.4% after Jefferies selected it as one of its top picks for 2025, citing the company’s strong earnings growth driven by recent tariff hikes in the telecom sector. The stock grew 17.8% in 6 months and 66% YTD, significantly outperforming the 5.1% and 13.9% rise of the NIFTY 50 Index during the same periods. From a technical perspective, the stock has broken out of a falling trendline, with Friday’s closing near the day’s high signaling a continuation of the uptrend. The major EMAs are trending upward, supporting the price action. Additionally, the RSI stands at 63, further confirming bullish momentum.
Written by Rachel HU Xinyue
Over the past week, U.S. markets experienced robust gains, with the Dow Jones rising by 188.59 points (+0.42%), reaching a 52-week high on November 29. The NASDAQ advanced by 157.69 points (+0.83%), while the S&P 500 increased by 33.64 points (+0.56%). The 10-year treasury yield fell 14 basis points to 4.265%, while the 2-year yield dropped 10 basis points to 4.264%. This positive performance appears to be driven, in part, by the announcement that President-elect Trump appointed Wall Street hedge fund manager Scott Bessent as the new U.S. Treasury Secretary. Bessent's support for moderating Trump's protectionist policies, including gradual tariff increases to combat inflation, has bolstered investor sentiment and strengthened confidence in the economic outlook. On November 27, the government released the latest PCE report, showing total PCE stabilizing at 2.3%, in line with market expectations, with a month-on-month increase of 0.2%. The labor market continues to demonstrate strength, with the unemployment rate holding steady at 4.1%, and third-quarter GDP growth recorded at a solid 2.8%. During the November monetary policy meeting, it was communicated that the Federal Reserve would pursue a gradual reduction in interest rates starting in December, in response to prevailing economic conditions. According to CME data, the probability of a 25 basis point interest rate reduction in December is estimated at 66%.
U.S. sector equities broadly showed an upward trend, with the exception of the Real Estate and Utility sectors, which recorded declines of 0.52% and 0.05%, respectively. Shares of key global semiconductor equipment firms jumped on Thursday after a report that the U.S. is considering sanctions on China’s chip industry that stop short of earlier proposal. The stock price of semiconductor company ASML increased by 2.9% on Thursday afternoon. On Friday, President-elect Trump nominated Dr. Marty Makary, a renowned pancreatic surgeon from Johns Hopkins University, as the new FDA commissioner. Dr. Makary, known for his medical expertise and opposition to anti-vaccine stances, replaces former commissioner Califf. This appointment has fostered investor optimism, leading to an uptick in pharmaceutical stocks.
Ambarella's stock (AMBA) rose 14% to $78.04 on Wednesday, driven by partnerships with Xpeng Motors and Honda and the resolution of inventory issues, despite the broader weakness in the semiconductor market. Dell Technologies (DELL) reported mixed quarterly results with sales falling short of expectations, leading to a 12.3% stock decline on Wednesday, the largest drop in the S&P 500 that day. Applied Therapeutics (APLT) stock plummeted 75% on Friday after the FDA rejected its experimental treatment application for the rare metabolic disorder galactosemia. On Tuesday, Eli Lilly (LLY) and Novo Nordisk (NVO) shares rose 6% and 2%, respectively, after the Biden administration proposed expanding coverage of their weight-loss drugs under Medicare and Medicaid.
Written by Robin HONG Yee Ching
European stocks experienced a rally on Friday, with the Stoxx Europe 600 Index closing 0.6% higher, driven by gains in the technology sector and resources-related stocks. However, concerns lingered over trade tariffs proposed by President-elect Donald Trump and ongoing political instability in France, where the government is struggling to pass the budget. Euro-area inflation has risen above the European Central Bank's (ECB) 2% target, yet officials remain committed to lowering interest rates in the near future. Despite these challenges, European equities have only gained 1% for the month, significantly lagging behind the S&P 500’s impressive 26% increase this year.
The technology sector led the gains on Friday, contributing significantly to the overall performance of European stocks. Miners also performed well, buoyed by strong iron ore prices amid expectations of increased stimulus from China. Conversely, sectors such as autos and utilities faced headwinds due to tariff concerns and political uncertainties. The market remains cautious as investors weigh the potential impacts of Trump's tariff plans and their implications for European exports.
Anglo American Plc saw a notable rise after Jefferies upgraded its rating to "buy," citing the potential for mergers and acquisitions. Direct Line Insurance Group Plc shares increased for a second consecutive day following reports that Aviva Plc had begun contacting its shareholders. Delivery Hero SE reversed earlier losses after announcing its Middle Eastern unit's IPO pricing at the top of the expected range. Overall, stock movements were influenced by deal-making news amidst broader market uncertainties related to tariffs and political developments in France.
Written by David LU Zhiyuan
This week, A-shares and Hong Kong Stock markets experienced a certain recovery after a slump. The SSE Composite Index increased by 1.57% and closed at 3326; the SZSE Composite Index increased by 2.33% and closed at 11072; the Hang Seng Index increased by 0.29% and closed at 19424. The recovery was boosted by factors such as rising domestic policy expectations of the Chinese Mainland, falling U.S. Treasury interest rates, and the dollar. Compared with A shares, Hong Kong stocks have recently recovered more from their highs; one is because Hong Kong stocks are more sensitive to the external disturbance of the "Trump trade," and the other is that the mood change of foreign investors is more drastic than that of domestic investors. In the correction process, overseas funds again flowed out, especially the further deepening of the proportion of active funds allocated to Chinese stocks.
The technology sector in A-shares and Hong Kong stocks faced declines last week. Semiconductor and internet stocks weakened amid demand concerns, with the CSCI Info Tech Index down 3.8%. Xiaomi has a decrease of 4.8%, and AAC Technologies stays unchanged, which is a significant decrease compared to the increase of 7% last week. The EV sector underperformed last week (November 25 to November 29, 2024). A-share leader BYD dropped 3.64% amid concerns over weak year-end consumer demand. Li Auto rose 1.3% in Hong Kong, driven by expectations of strong November sales. Overall, the sector saw significant capital outflows, with cautious investor sentiment. The consumer staples sector showed resilience last week (November 25–29, 2024). A-share leaders Wuliangye and Moutai rose 1.6% and 1.98%, respectively, supported by year-end demand recovery. In Hong Kong, Mengniu Dairy gained 2.1% on strong sales expectations, while overall sector sentiment improved amid easing concerns over domestic consumption growth.
Alibaba Group (9988.HK): Alibaba rebounded after a two-month decline, supported by bargain hunting and optimism about its restructuring strategy. Improved sentiment in the e-commerce sector, driven by Singles' Day sales data, may have also contributed. Baidu (9888.HK): Baidu recovered after a month-long decline, likely driven by optimism around its AI ecosystem and the recent expansion of its large language model (Ernie Bot). The rebound also reflects oversold conditions in prior weeks. Hangzhou Wensli Silk Culture (301066.SZ): Wensli surged due to expectations around its high-end silk product expansion and increased demand for cultural exports. Speculative trading likely amplified the gains.
Written by Dacian DENG Shen
Japanese stocks posted modest losses last week, with the Nikkei 225 falling 0.2% and the TOPIX Index down 0.6%. Geopolitical risks dampened global investor sentiment, boosting demand for safer assets. The resulting yen appreciation pressured Japan's export-heavy sectors. On the Tokyo Stock Exchange Prime Market, 40.3% of stocks rose, while 56.6% declined. The yen strengthened to around JPY 150 against the USD, from JPY 154 the previous week, driven by safe-haven appeal and domestic inflation concerns. The Tokyo-area core CPI rose 2.2% year-on-year in November, exceeding expectations and fueling speculation of a Bank of Japan (BoJ) rate hike, likely in December or January. The 10-year Japanese government bond yield fell to 1.06% from 1.08% but remained near a 13-year high amid BoJ rate hike speculation. Governor Kazuo Ueda reiterated that rate increases depend on economic and price trends meeting forecasts. Prime Minister Shigeru Ishiba presented a stimulus plan to parliament, seeking approval for an extra budget to support rural economies and counter inflation's impact. The plan includes energy subsidies, cash handouts for low-income households, and a higher tax-free salary threshold to boost disposable income. Ishiba aims to foster wage growth exceeding inflation and investment-led economic growth, continuing his predecessor’s policy direction.
By sector, transportation equipment, machinery, precision instruments, electrical equipment, and shipping saw declines, while banking, insurance, textiles, services, and utilities posted gains. The market remained resilient, supported by buying in financial and domestic demand-driven stocks.
Toyota Motor Corporation shares remained stable on Friday. In October, global sales rose 1.4% to 903,103 vehicles, the first increase in five months. Sales outside Japan grew 0.4% to 759,555, including Lexus but excluding Daihatsu and Hino. North American sales dropped 5.3%, while Latin America saw an 18.6% rise, and Europe grew by 1.4%. Global production fell 0.8% year-over-year to 893,164 vehicles. Production in China decreased 8.7%, and Thailand saw a 12.8% decline. Toyota plans to produce at least 2.5 million vehicles annually in China by 2030, emphasising closer integration of sales and production and more local executive control. In the U.S., North American COO Jack Hollis criticised rapid EV adoption policies, arguing they don't align with consumer demand. He noted a gap between regulatory goals and buyer preferences, particularly regarding EPA and California emissions standards. Stock Movement: TM shares rose 0.40% to $170.40 as of the latest check Friday.
Written by Justin CHUNG Lok Yin
The Sensex benchmark and the NIFTY 50 Index both experienced a downturn on November 28, Thursday and did not recover during the week. They recorded declines of 0.47% and 0.74% respectively. The drop is attributed to increased geopolitical tensions in Israel and Ukraine. Against a backdrop of a strengthening US dollar and rising bond yields since September, investors may have shifted their focus to bonds and forex, contributing to the mid-week downturn. On November 29, preliminary data released by the Ministry of Statistics and Program Implementation indicated that India's GDP growth was only 5.4% year-over-year in the third quarter of 2024, well below the lowest forecasts. This marked the slowest growth rate since the fourth quarter of 2022. Despite initiatives like the PLI scheme and the "Make in India" campaign, manufacturing growth decelerated to 2.2%. Furthermore, exports slowed to 2.8% and imports shrunk by 2.9%, underscoring significant domestic challenges. Coupled with recent strong inflation figures (recap: domestic inflation hit a 14-month high of 6.21% last week, surpassing the 6% threshold), analysts are now divided over whether the Reserve Bank of India will implement a rate cut or maintain rates at their next meeting on December 6. The consensus leans towards maintaining current rates.
The agriculture sector saw a recovery, growing at a rate of 3.5% after underperforming in the previous four quarters, indicating a potential uptick in rural demand. In October, coal, steel, and cement production increased by 7.8%, 4.2%, and 3.3% respectively. Conversely, crude oil and natural gas production fell by 4.8% and 1.2%. Manufacturing growth in the third quarter of 2024 slowed to 2.2% from 7.0%. The construction sector's momentum was sluggish, and the mining and quarrying sector entered a contraction phase.
Adani Enterprises Ltd (NSE: ADANIENT) Rebound Attempt: Following allegations of fraud involving the company’s executives last week, Adani Enterprises' stock price bottomed at ₹2145.65 on November 26, Tuesday. This week, Adani issued a statement denying all bribery allegations against Chairman Gautam Adani. The group also assured that all its portfolio companies have adequate liquidity to meet their debt obligations for at least the next year. Following these positive announcements, subsidiary Adani Green Energy (NSE: ADANIGREEN) saw a 10%increase, while the main company, Adani Enterprises, surged by 11.5%.
Written by Sarah LEONG Si Ian
In the previous week, 3 major indexes rallied due to higher-than-expected global service PMI and the S&P 500 peaked at 5972.9, +0.35%. Russell 2000 also steadily increased, hitting a peak of 2409.22, +1.87%. The NASDAQ Comp closed at 19003.65 on Friday.
Data-wise, the U.S. labour market remained healthy with the initial jobless claims stood at 212k, down from expectations of 220K. The Service PMI index improved to 57, signalling growth in the service sector. Existing home sales were reported at 3.96 million, slightly higher than expected, which seemed to help drive positive sentiment toward the end of the week.
WTI prices, at $70.7 received some support from a drop of US API weekly crude oil stock was reported on Wed at 4.753 million, fell by 0.573, as well as from the rise in PMI data.
The utilities sector outperformed as commentary on NVIDIA’s earnings call seemed to drive optimism around rising artificial intelligence-driven demand for clean energy.
Communication services stocks lagged, driven in part by a drop in shares of Google parent Alphabet following reports of the Justice Department filing a proposal to break up the internet search giant.
AAPL fluctuated throughout the week but exhibited an overall upward trend, reaching a peak of 230.72. In the previous week, the net outflow exceeded the net inflow by 32,576.87, with the majority of transactions being small orders. The total trading volume was 821.39K, and the put-call ratio stood at 0.68, indicating a bullish sentiment toward the stock. Apple’s P/E ratio was 37.81, significantly higher than the historical 10-year average of 21.43. NVDA’s Q3 earnings release on Wednesday. Shares of the chip giant ended the week little changed as investors appeared to be generally satisfied with the results.
Written by Kathy TAM Ka Loi
European markets had a mixed day, with the Stoxx 600 index up 1.18%, fueled by strong performances in health care and retail stocks. In the U.K., the pound hit a six-month low against the U.S. dollar after retail sales fell 0.7% in October, much worse than the expected 0.3% drop. Despite this, the FTSE 100 rose 1.4% as investors considered the possibility of interest rate cuts from the Bank of England. Meanwhile, the euro weakened after disappointing PMI data revealed a significant decline in Eurozone business activity, with the composite index dropping to 48.1 in November. This was largely due to reduced new business and ongoing political instability in France and Germany, while Germany's GDP growth for the third quarter was revised down to just 0.1%.
In November 2024, the UK retail sector faced significant challenges as retail sales fell more than expected, declining by 0.7% on a monthly basis in October, in contrast to a revised 0.1% rise in September. Excluding auto fuel, sales fell 0.9%, with non-food stores experiencing a 1.4% reduction in sales volumes. Factors contributing to this downturn included reduced consumer spending on food and clothing, alongside heightened uncertainty from the Autumn Budget, which raised concerns about tax increases. Year-on-year growth in retail sales slowed to 2.4% in October from 3.2% in September. Despite the decline, consumer confidence showed some improvement in November, with the confidence index rising to -18 from -21 in October, suggesting that consumers were beginning to feel slightly more optimistic ahead of the holiday shopping season. However, the overall economic picture remains precarious, as households grapple with budget uncertainties and inflationary pressures.
The Underperformance of NVO: Novo Nordisk's stock has plunged 25.1% over the past three months, significantly underperforming the industry and the S&P 500. This decline was primarily driven by disappointing third-quarter results, where diabetes and obesity care sales failed to meet investor expectations, leading management to lower its forecasts for both sales and operating profit growth. The company is struggling to meet the heavy demand for its semaglutide drugs, Ozempic and Wegovy, particularly in the U.S. market. In contrast, competitor Eli Lilly has successfully increased its production capacity for similar drugs. Furthermore, criticism from U.S. Senator Bernie Sanders regarding high drug prices compared to other countries has added to the stock's challenges. Despite these setbacks, analysts remain optimistic about Novo Nordisk's strong fundamentals, including a 90.3% revenue increase over five years and a net profit margin exceeding 31%, suggesting that the current decline may represent a temporary setback for long-term investors.
Written by Alexander ANTONIOU
Chinese equities faced declines, with SSE Composite Index dropping 3.06% and SZSE Component falling 3.52%. Investors expressed concerns about the effectiveness of recent stimulus and potential for higher American tariffs under the Trump administration, contributing to a negative sentiment in the market. HSI has also declined as a result of this, with a 1.9% loss (371 points). The Chinese government has been investing effort in supporting the economy, including a debt swap worth RMB 10 trillion, to ease local government debt burdens; analysts indicate that more robust measures may be required to offset the effects of potential US policy changes. Chinese banks left their one- and five-year loan prime rates unchanged at 3.1% and 3.6%, respectively. The move was largely anticipated after banks slashed the benchmark lending rates by a greater-than-expected 25 basis points in October, making it cheaper for consumers to take out mortgages and other loans.
Chips, internet and securities services industries declined while Apple concept stocks rose against the trend, with AAC Technologies (2018.HK) rising more than 7%. On the news front, it is reported that Apple is developing a Siri digital assistant with stronger conversational capabilities, aiming to surpass OpenAI's ChatGPT and other voice services.
The gaming sector outperformed as the National Press and Publication Administration announced the approval information of domestic online games in November 2024. A total of 112 games were approved, and the number of games issued exceeded 110 for the second consecutive month.
The EV sector underperformed as Warren Buffett’s Berkshire Hathaway pared its stake in BYD to less than 5%, further unwinding its long-term bet on China’s largest electric-vehicle maker amid a broader refocus on U.S. investments.
Baidu (9888.HK) plunged over -8% in Hong Kong after the search engine operator reported disappointing Q3 online marketing revenue. Alibaba Group (9988.HK) fell more than -4% in Hong Kong after rival PDD Holdings cautioned about intensifying competition in the e-commerce industry. CNOOC (0883.HK/600938.SH) added 1.19% after announced to add a fourth production vessel to the ones already operating in the Stabroek Block offshore Guyana, alongside with Exxon Mobil and Hess. Xiaomi (1810.HK) rallied for 1.42% on Fri as internal sources claimed that it's second EV model is planned to be launched in Feb/ March next year.
Written by Kim CHUI Chunho
Following two consecutive sessions of declines, Japan’s Nikkei 225 and TOPIX indices rebounded, closing higher by 0.68% at 38,283.85 and 0.51% at 2,696.53,
respectively, on Friday. However, both indices recorded weekly losses of 1.6% and 1.06%. This rebound was driven by gains in technology stocks, particularly those weighted in chips, in response to NVIDIA’s rise in the US NASDAQ market. Nonetheless, concerns over high valuations and a strengthening US Dollar Index continued to exert selling pressure on the Japanese stock market.
In November, data from the Japanese Ministry of Statistics revealed that domestic inflation for October increased by 2.3% year-on-year (YoY), slightly surpassing the forecast of 2.2%. This marks the highest inflation rate in 14 months, exceeding the Bank of Japan's (BOJ) target of 2%.
The persistently high inflation has diminished the effectiveness of domestic consumption stimulus measures, leading to lowered market expectations for a potential rate cut by the BOJ at its upcoming policy meeting on December 18-19. Analysts now anticipate a hike in short-term rates to 0.5% from the current 0.25%, as inflationary pressures persist due to rising wages and the renewed depreciation of the yen.
Technology Sector: Chip-making equipment maker Tokyo Electron (8035.T) jumped 2.16%; Chip-testing equipment maker Advantest (6857.T) rose 0.66%; Chip materials maker Resonac (4004.T) jumped 4.66%.
Transportation Sector: The TOPIX Transportation Equipment Index (.ITEQP.T) experienced a slight decline of 0.15%, with Toyota Motor (7203.T) falling by 0.37%, which weighed on the Topix index.
Health Services Sector: The TOPIX Pharmaceutical Index (.IPHAM.T) decreased by 0.43%, driven by a 1.07% decline in Daiichi Sankyo (4568.T).
On Wednesday, November 20, Sony Group Corp. (TYO: 6758) announced acquisition discussions with media conglomerate Kadokawa, the company behind popular titles such as Elden Ring and Sekiro: Shadows Die Twice. In early afternoon trading, Kadokawa shares rose by 15.91% to ¥4,341 on the Tokyo Stock Exchange, while Sony Group Corp. also advanced by 2.86% to ¥3,020, despite the broader market’s Nikkei 225 index drifting lower.
According to data from a Sony presentation, the anime market is projected to nearly double to $60 billion by 2030, indicating significant growth potential in Japan's gaming and entertainment industry.
Written by Charles SHI Qiyuan
Despite a significant mid-week decline, both the Sensex benchmark and the NIFTY 50 Index rebounded to close higher, with respective gains of 1.98% and 1.46%. This is driven by widespread healthy buying, particularly in heavyweight stocks. However, concerns over high valuations and the rise of the US Dollar Index continued to exert selling pressure on the Indian stock market. Since October, foreign institutional investors have withdrawn a total of INR 1.2168 trillion (equivalent to over HKD 120 billion). On November 18, net selling of Indian equities by global funds triggered a sharp market downturn, with the Sensex falling by 853.99 points (0.31%) to close at 77,339.01 points, reflecting a cumulative decline of more than 10% from its September peak. Similarly, the Nifty index has also fallen by more than 10% from its historical high. Furthermore, data from the Indian Ministry of Statistics revealed that domestic inflation for October rose by 6.21% year-on-year, the highest level in 14 months, exceeding the RBI’s tolerance band of 2%-6%. The persistence of high inflation has further dampened the effectiveness of domestic consumption stimulus measures, diminishing market expectations for a potential rate cut by the RBI at its upcoming policy meeting on December 6.
The upcoming results of the Maharashtra elections could lead to a rebound in the infrastructure and banking sectors. The NDA, led by the BJP, is expected to secure a decisive victory in the elections, and the government has placed a special focus on infrastructure development. As companies in the infrastructure sector seek credit lines from banks, banking stocks may also see some potential buying interest. Investors have already started to pay attention to stocks in the railway, infrastructure, and banking sectors. The positive impact of political stability on investor sentiment is likely to drive a shift in investment strategies from defensive to more aggressive positions.
Stock Crash of Adani Enterprises Ltd (NSE: ADANIENT): On Thursday, November 21, Gautam Adani and seven other corporate executives were charged in New York for allegedly being involved in a multi-billion-dollar bribery and fraud scheme. Despite the group denying the allegations and actively seeking legal remedies, panic selling led to significant losses in Adani Group-related stocks. The biggest drop was seen in the heavyweight stock Adani Enterprises, which closed at ₹2,182.55 on the 21st, falling 22.61% to reach its lowest point. This sell-off directly impacted the Indian stock market, with Sensex dropping 422.59 points (0.54%) and NIFTY 50 falling 168.60 points (0.72%) on the same day.
Written by Erika Lau and Kevin Xia
The U.S. stock market saw a partial retreat from the gains made during the “Trump Trade” period, with uncertainty surrounding the new administration’s policies influencing market movements. Data-wise, inflation data on Wed were largely in line with expectations with headline prices rising 0.2% in October and core prices rising 3%. Yoy headline inflation rose from 2.4% to 2.6%, for the first time since March. Powell spoke on Thu that “the economy is not sending any signals that we need to be in a hurry to lower rates.” Which lowers the CME 25bps cut in December from 64.6% to 58.4%. Long-term interest rates rose, reflected in the 10-year U.S. Treasury note reaching a five-month high. Corporate bond markets saw active issuance, with spreads widening as investors focused on new supply. Similarly, the high yield market experienced some downward pressure due to rate movements and increased primary market activity, while the bank loan market remained active with a high volume of new deals.
Electric vehicle (EV) stocks, including Tesla, experienced fluctuations following reports of the potential end of tax credits for EV purchases by the incoming administration. Economic indicators such as inflation data and remarks from Federal Reserve Chair Jerome Powell added to market dynamics, with expectations for interest rate cuts shifting slightly over the week. Bitcoin had surged by nearly a third (32.46%) since the eve of the election, as investors anticipated looser regulation of digital currencies. However, sectors like financials and energy benefited from hopes of deregulation, while health care shares faced a decline due to concerns over the nomination of Robert F. Kennedy, Jr., known for his criticisms of the pharmaceutical industry.
In local currency terms, the pan-European STOXX Europe 600 Index ended 0.69% lower, falling for a fourth consecutive week due to the concern about upcoming Trump administration and trade policies. Higher tariffs on eurozone exports to the US could weaken economic growth in the eurozone, but would have a mixed effect on inflation, according to ECB’s Piero Cipollone. The impact on euro area inflation could be offset by a weakening euro, which would increase the prices of imports priced in US dollars. The European Commission’s Autumn Economic Forecast projects GDP growth in 2024 at 0.9% in the EU and 0.8% in the euro area. Economic activity is expected to accelerate in 2025 and 2026, with inflation easing significantly.
The Shanghai Composite Index fell 3.52%, while the blue chip CSI 300 gave up 3.29%. HSI plunged 6.28% amid persistent deflation pressure and worries over US tariffs. China consumer price index rose 0.3%, lower than consensus and down from 0.4% from Sep.
Property - There was a 0.5% decrease in new home prices across 70 cities in October compared to September. This followed a 0.7% drop in home prices from August to September. Bloomberg reported that October saw the second consecutive month of decelerating home price declines, with the slowest rate of decline since March. The positive trend was attributed to a set of stimulus actions implemented by Beijing in recent months to revitalize the housing market, such as lowering mortgage rates, easing home purchase restrictions in major cities, and reducing taxes on property transactions.
Japan’s stock markets experienced a decline during the week, with the Nikkei 225 Index dropping by 2.2% and the broader TOPIX Index decreasing by 1.1%. The yen depreciated to the JPY 155 level against the U.S. dollar, compared to 152.6 following the US election outcomes. This shift was influenced by anticipations that Trump’s win could lead to inflationary policies, potentially impacting the Federal Reserve’s intentions to reduce borrowing rates.
Written by Erika Lau
Positive bank and tech earnings over the past week saw Wall Street indexes hit a series of record highs, with upcoming earnings likely to decide whether this momentum will continue. The S&P 500 rose 0.4% to 5,864.67 points on Friday, while the NASDAQ Composite rose 0.6% to 18,489.67 points. The Dow Jones Industrial Average edged up 0.1% but just managed to hit a record high of 43,257.91 points. U.S. retail sales increased 0.4% last month vs est. 0.3% vs prev. 0.1%. A measure of retail sales that excludes auto dealerships, building materials, food services, and gas stations climbed 0.7% from the prior month—the fastest rate of growth in three months. Industrial production dropped 0.3% in September after increasing 0.3% in the preceding month. The final number for August was revised downward from an initial estimate of 0.8%. Initial jobless claims fell unexpectedly to 241,000.
Energy stocks pulled back in sympathy with oil prices, which retreated as fears of possible Israeli attacks on Iran’s oil and gas infrastructure subsided. Strategist at Bank of America, pointed out that in view of the increased possibility of Trump being elected and the Republican Party taking control of Congress, investors have begun to increase their positions in assets that performed well after Trump won in 2016, including banks, small stocks and the U.S. dollar.
Netflix NFLX was up 11% on Friday after reporting to have grew its subscriber numbers and expanded its operating margins by more than expected in the third quarter. Strong quarterly results from Taiwan Semiconductor Manufacturing TSM, which operates foundries that make advanced digital semiconductors, appeared to reignite excitement for artificial intelligence (AI)-related stocks that are in the Nasdaq. This week: TSLA is the biggest company to report earnings this Wed, after another EV maker GM on Tue. Major chips stocks TXN (Tue) LRCX (Wed) and WDC (Thu) are also set to report. Boarder tech sector IBM due on Wed. Telecom majors VZ (Tue), TMUS (Wed) and T (Wed) are also due. Consumer names LRLCY (Tue), MMM (Tue), KO (Wed)
Chinese equities rose as the central bank unveiled more support measures after data showed that deflationary pressures grew more entrenched in the economy. The Shanghai Composite Index gained 1.36% in local currency terms, while the blue chip CSI 300 added 0.98%. HSI Index fell 2.11%. GDP reported to be at 4.6% higher than consensus, though lower than Q2 at 4.7% and government’s target at 5%. Other economic data showed signs of improvement. Industrial production rose a better-than-expected 5.4% yoy vs prev. +4.5%. Retail sales grew an above-forecast 3.2 yoy vs prev. +2.1%. Higher sales ofhousehold appliances were a contributing factor. Meanwhile, PPI fell a bigger-than-expected 2.8% from a year ago, deepening from August’s 1.8% drop.
TAIEX were up 2.3% driven up by TSMC (2330) positive earnings report on Friday. Net revenue came in at $23.5 billion in the third quarter, up 36% year on year. The starting price of Vivo’s latest “X200” series equipped with MediaTek’s (2454) new flagship 5G chip “Dimensity 9400" is 7.5% higher than market expectations. The industry believes that it is related to the substantial increase in the unit price of MediaTek’s Dimensity 9400, which is expected to trigger subsequent more non-Apple brands followed up with price increases, benefiting the share price ofMediaTek.
Written by Erika Lau
S&P 500 ended higher over the week driven by upside earning surprise despite disappointing economic data. Markets were pricing a roughly 18% chance the Fed doesn’t cut in November, up from a 3% chance seen a week prior, per the CME FedWatch Tool. Thursday released headline and core (less food and energy) inflation, which rose in September by 0.2% and 0.3%, respectively, both a tick above expectations. There was also a surprising jump in weekly jobless claims to 258,000, the highest level in 14 months. Long-term bond yields also rose in the wake of the inflation data, with the yield on the benchmark 10-year U.S. Treasury note hitting its highest intraday level (4.12%) since July 31. The investment-grade corporate bond market remained also mostly oversubscribed. Focus this week is now on addresses from a string of Fed officials, which are likely to provide more cues on the central bank’s plans to cut interest rates further.
JPM and WF rose on Friday after the banking giants reported smaller-than-feared declines in third-quarter profits. NVIDIA raised following reports that the Justice Department was considering asking a federal judge to order a breakup of the company. TSLA weakened after the disappointing unveiling of its new “robotaxis” and “robovans.” Upcoming earnings report this week: JNJ, BAC, C, GS, UAL set to report on Tuesday. MS will report on Wednesday, rounding out the major bank earnings. Chipmaking bellwether also reports on Wednesday. NFLX will report on Thursday.
Shanghai Composite Index lost 3.56%, CSI300 -3.25% and HIS -6.53%, pulling back from the peak in the week before after optimism of the policy boost faded. The People’s Bank of China initiated a swap facility worth RMB 500 billion to inject liquidity into institutional investors for stock purchases. This program allows nonbank financial entities like securities firms, funds, and insurers to access highly liquid assets such as government bonds and central bank bills by providing specific collateral. This move was a part of an extensive stimulus plan unveiled by the central bank in late September, which encompassed interest rate reductions and other strategies aimed at revitalizing China’s economy. Spending by Chinese consumers during the recent extended holiday fell short of pre-pandemic levels. Official data revealed a 5.9% rise in passenger traffic and a 6.3% increase in spending compared to the previous year. Box office earnings stood at RMB 2.1 billion, a decline from RMB 2.7 billion recorded a year ago. Nevertheless, the average daily expenditure per trip rose to about RMB 131, up from RMB 113 during the five-day Labor Day break in May. Earlier this morning, Goldman Sachs raises China’s GDP forecast to 4.9% in 2024.
EV: Guangzhou Automobile Group Co 2238.HK is exploring the manufacture of EVs in Europe to avoid EU tariffs. It will launch an electric SUV tailored to the European market at the Paris Auto Show, kicking off on Monday.
TAIEX was up 1.92% following the rally in the US market and over the chip sector. TSMC led the raise for 4.73% while Hon Hai dropped 0.5%.
Semiconductors: TSMC 2330.TW and Largan 3008.TW will jointly hold a meeting on the 17th. TSMC will announce its third-quarter operating results and release its industry outlook. With ASML’s financial report will be released the day before TSMC’s legal meeting, investors are concerned about the Dutch government’s expansion of its export controls on two deep ultraviolet exposure machines (DUV) from mainland China, including the 1970i and 1980i. Automobile: Tong Yang Industry Co Ltd 1319.TW (+1%) reported 3.934 billion yuan before tax revenue in the first three quarters of last year.
Written by Erika Lau
Over the week, S&P 500 moved to record highs, as investors appeared to celebrate new stimulus measures in China. Sector-wise, Chemicals and materials stocks were particularly strong on hopes for a rebound in Chinese demand. Copper prices also increased, raising hopes that “Doctor Copper” was again reflecting a healthier global industrial economy. Technology stocks outperformed as well, helped by reports of a possible takeover of Intel and news that NVIDIA’s CEO had ceased sales of his own shares in the company. In addition, chipmaker Micron Technology surged and seemed to provide a general tailwind for the sector following its upbeat outlook for AI demand. Data-wise, Consumer confidence on Tue fell to 98.7, largely missed consenus of 103.9. New home sales on Wed declined 4.7% in August while building permits data were revised lower. PCE on Fri rose only 0.1% in August, a tick below expectations. On a yoy basis, the index climbed only 2.2%, close to the Fed’s 2.0% long-term inflation target and the least since February 2021, suggesting a moderation in inflationary pressures. The yield on the benchmark 10-year U.S. Treasury note ended little changed for the week.
Chinese stocks surged after Beijing unveiled a slew of measures to shore up the economy. The Shanghai Composite Index climbed 12.8%, while the blue chip CSI 300 soared 15.7%. In Hong Kong, the Hang Seng Index gained 13%. PBOC cut its RRR by 50 basis points, and reduced its seven-day reverse repo rate by 20 basis points to 1.5%. It cut the MLF rate by 30 basis points to 2%, marking the largest-ever cut to the monetary policy tool since 2016. The moves were part of a sweeping stimulus package announced last Tuesday at a rare press conference by PBOC Governor Pan Gongsheng that aims to jumpstart China’s ailing economy. Other measures unveiled by the PBOC included a rate cut for existing home mortgages and slashing the nationwide down payment ratio for second home purchases to 15% from 25%.
Japan’s stock markets gained over the week, with the Nikkei 225 Index rising 5.6% and the broader TOPIX Index up 3.7%. The latest commentary from the Bank of Japan (BoJ), perceived as dovish, weighed on the yen, providing a favorable backdrop. Optimism also came from China’s stimulus announcements, especially for the exports to China. The new Prime Minister was elected to be Shigeru Ishiba on Fri, who has been critical of the Bank of Japan’s easy policies in the past. However, he sounded more conciliatory over the weekend saying monetary policy “must remain accommodative” given the state of the economy. That helped the dollar bounce 0.5% to 142.85 yen, after sliding 1.8% on Friday from a 146.49 top. Interest rate - BoJ Governor Kazuo Ueda said that the central bank has enough time to assess market and economic developments before adjusting monetary policy again—suggesting that it is in no rush to raise rates further.
Written by Erika Lau
The large-cap indexes moved to record highs as investors celebrated the kickoff of the rate-cutting cycle by a 50 bps cut on Thursday morning. The rally was also relatively broad, with the smaller-cap indexes outperforming, although they remained below previous peaks—the small-cap Russell 2000 Index, in particular, ended the week roughly 9% below the all-time high it established in November 2021. The rally is accompanied by good consumer data that ease recession fears. Retail sales on Tue had risen 0.1%, which was more than expected and which followed an upwardly revised jump of 1.1% in July. The downside surprise on jobless claims on Thu provided more evidence for supporting the consumer in good shape. The housing sector also improved by a 4.9% rise in housing permits of August on Wed, although sales of existing homes had unexpectedly fallen 2.5%.
10 year treasury yield rose. Spreads in the investment-grade corporate bond market tightened throughout the week as higher rates spurred demand early in the week. Issuance occurred early in the week, before the Fed’s policy meeting, and was, on average, oversubscribed.
INTC ended the week with an announcement of a potential acquisition with Qualcomm which helped pushed the stock up 11% for the week.
Chinese equities rose in a holiday-shortened week as the Fed’s decision to cut interest rates offset a batch of disappointing economic data. The Shanghai Composite Index gained 1.21%, while the blue chip CSI 300 added 1.32%. Disappointing foreign direct investment flows on Friday were down 31.5% on the same period last year, the biggest fall since January 2009. Industrial production rose 4.5% from a year earlier, lagging forecasts and down from July’s 5.1% increase amid weaker commodity prices and auto sales. Retail sales expanded a below-consensus 2.1% from a year ago, easing from July’s 2.7% rise. The yuan is its strongest in 16 months though, thanks to the central bank’s reluctance to cut rates and rising expectations that authorities will soon unveil stimulus that will revive growth, asset prices and confidence. Sector-wise, EU tariffs on Chinese EV makers are revised down. BYD saw tariffs cut to 17% from 17.4%, Geely to 19.3% from 19.9%, and SAIC saw a reduction to 36.3% from 37.6%. Despite the tariffs, analysts say Chinese EV prices will remain competitive in Europe when compared to Chinese-made Tesla. Research by Rhodium group suggests tariffs of up to 50% are needed to significantly deter Chinese EV exports. Tech-front, the U.S. Commerce Department is expected on Monday to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on U.S. roads due to national security concerns, sources told Reuters. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware. More details await.
BYD is expected to expand into Pakistan in partnership with Pakistan’s biggest private electricity producer Hub Power’s subsidiary Mega Motor to set up the country’s first electric vehicle assembly plant by 2026.
Japan’s stock markets rose over the week, with the Nikkei 225 Index gaining 3.1% and the broader TOPIX Index up 2.8%. The Bank of Japan decided not to raise rates, but it signaled it is in no hurry to raise them again. This helped push the yen to its weakest daily close since September 4, which in turn helped lift Japanese stocks. The yen starts the week on a soft footing after a roller-coaster ride last week. It rallied through 140.00 per dollar for the first time in over a year but closed near 144.00 per dollar for a weekly loss of 2%, its worst week since April. Data-wise, core CPI rose 2.8% year on year in August, in line with expectations and up from 2.7% in July. The overall CPI rose 3.0%, also matching consensus and up from the prior month’s 2.8%.
Written by Dacian Deng
U.S. stocks rebounded after a sell-off, led by strong gains in growth stocks, particularly in the tech sector, with NVIDIA playing a key role. Inflation data for August was mixed, with core inflation slightly exceeding expectations, while housing sector data offered some hope as mortgage rates hit their lowest level since February 2023. Treasury yields also reached year-to-date lows, with strong performance in high-yield bonds supported by equity gains and expectations of a Federal Reserve rate cut. FOMC cut rates by 50 basis points (bps), bringing them to a range of 4.75%-5.0%, but signalled a more gradual pace of rate cuts moving forward. The dot plot suggests further cuts totalling 100bps in both 2024 and 2025, indicating a cautious approach. Chairman Powell emphasized that the economy is not at risk of recession, with the labour market remaining a key focus to prevent further deterioration. While markets had priced in 250bps of cuts over the next year, Powell’s remarks and the dot plot suggest that actual rate cuts will likely be smaller, around 150bps, unless the economy weakens significantly. The Fed will continue to monitor economic data to guide future decisions, implying a flexible policy stance going forward.
Stocks rose following an interest rate cut by the European Central Bank (ECB), though the ECB gave no clear direction on future policy moves. Meanwhile, the UK economy stagnated, but wage growth remained high, complicating inflation control efforts.
Japan saw mixed stock performance, and hawkish comments from policymakers pointed to further rate hikes. However, GDP growth for the second quarter was revised lower. In China, weak inflation data raised concerns of an economic slowdown, although export growth exceeded expectations, providing a rare bright spot amid ongoing challenges in the property sector. Reference: https://corporate.nordea.com/article/95391/fomc-review-don-t-get-used-to-50s https://www.troweprice.com/personal-investing/resources/insights/global-markets-weekly-update.html
Written by Erika Lau
Stocks ended mixed in light pre-holiday trading with the Nasdaq Composite performing the worst due to NVIDIA's decline of more than 10%. CPE raise by 0.2% in July, largely as expected, although the year-over-year increase came in a tick lower than consensus, at 2.6%. Investors seemed pleased with confirmation that inflation was remaining subdued and near the Fed’s target, with Nasdaq futures, in particular, surging in the wake of the release. Personal incomes had increased an unexpected 0.3% in July, up from June’s 0.2%. Personal spending rose even more, 0.5%, although the gain was in line with consensus. The yield on the benchmark 10-year U.S. Treasury note drifted higher over the week, as hopes appeared to dim that the Federal Reserve would cut interest rates by a full 50 basis points (0.50 percentage point) at its mid-September meeting.
European stock indexes rose, with STOXX Europe 600 reaching a record high amidst prospects of ECB interest rate cuts. The pan-European STOXX Europe 600 Index surged by 1.34%, reaching an all-time high. This key indicator continued its upward trend for the fourth consecutive week as significantly slower inflation provided grounds for the European Central Bank (ECB) to consider reducing interest rates in September. Inflation has approached its target level, with headline annual inflation dropping to 2.2% in August from 2.6% in July—the lowest figure in three years and slightly above the ECB's 2% goal.
The Shanghai Composite Index is down for 0.43% while HSI is up for 2.17% after mixed corporate earnings data. Investor downgraded their expectations on some of the key economic data such as Retail Sales, from 4.5% to 4.0%, Fixed Asset Invesment, from 4.4% to 4.2% and Consumer Price Index, from 0.6% to 0.5%. Given the above slowdown in growth, China might not be able to meet it’s GDP target of 5% this year. In terms of monetary policy, the medium-term lending facilities remains the same at 2.3% while the short term 7 day repo lending rate remains at 1.7%.
Written by Kayla Tarliman
Last week saw significant fluctuations in US stocks. An early-week rally propelled markets to new highs, but the momentum faded towards the end of the week, primarily due to a downturn in the tech sector. The major indices ended mixed: the S&P 500 and Nasdaq closed lower, while the Dow posted a solid gain.
Both stock prices and interest rates had been rising together earlier in 2024. However, recently, interest rates have declined significantly due to moderating inflation and anticipated Fed rate cuts. Despite this, equities continue their uptrend, bolstered by rising corporate earnings.
A key theme last week was the rotation in market leadership. The tech sector experienced a pullback, while cyclical sectors, which had lagged this year, gained traction. This shift was highlighted by a robust rally in small-cap stocks. Such changes underscore the importance of maintaining a diversified and balanced investment portfolio.
A sharp selloff in high-flying tech stocks led to the S&P 500 experiencing its worst day since December 2022. The index fell 2.3% on Wednesday, breaking a 356-session streak without a 2% decline, its longest streak in 17 years. This came after the index had risen significantly above its 200-day moving average the previous week, a level historically associated with past selloffs.
European stocks are set to open lower on Thursday following significant losses in US stocks overnight, driven by steep declines in the tech sector. European markets extended their losses on Friday, marking the longest losing streak since October 2023. A tech outage caused by defective CrowdStrike software disrupted Microsoft’s Azure and Office365 services, affecting various sectors globally.
By mid-morning CET, the Euro STOXX 50 had fallen 0.5%, and the Euro STOXX 600 was down 0.6%, marking the fifth consecutive session of losses. Major country indices were all in negative territory, with Germany’s DAX down 0.8%, Italy’s FTSE MIB down 0.7%, France’s CAC 40 down 0.7%, and Spain’s Ibex 35 down 0.3%.
Travel and shipping sectors were hit hard by the tech outage. Air France-KLM’s Dutch arm halted most operations, leading to a 1.1% drop in its shares. Lufthansa Group shares fell 1.5% amid warnings of potential delays and cancellations. Similarly, low-cost carriers Ryanair and Wizz Air experienced significant check-in system failures, causing shares to drop by 2.9% and 2.1%, respectively.
European banks also recorded losses, though less severe than those in the travel and shipping sectors. French banks BNP Paribas, Societe Generale, and Credit Agricole saw declines, as did Spanish banks Banco Santander, BBVA, and Bankinter. In Germany, Deutsche Bank shares fell by 1.5%, marking their tenth negative session in the last eleven.
In the bond market, yields held steady, with Bund yields down marginally by 1 basis point to 2.43%. The euro eased by 0.1% against the dollar, falling to 1.0880, while the British pound was down 0.3% to 1.2910.
CrowdStrike Holdings plummeted over 20% in pre-market trading after an update to its cloud platform caused disruptions to Microsoft’s Azure systems. This marked CrowdStrike's worst daily performance since its IPO in 2019. Meanwhile, competitors like SentinelOne, Palo Alto Networks, and Cloudflare saw gains.
Chinese shares ended lower due to muted investor sentiment. The Shanghai Composite Index fell 0.5%, the Shenzhen Composite Index declined 1.3%, and the ChiNext Price Index dropped 1.2%. Property and auto stocks led the losses, with limited expectations for property stimulus measures from the upcoming Politburo meeting. Hong Kong shares also ended lower, weighed down by technology stocks. The Hang Seng Index fell 0.9%, and the Hang Seng Tech Index declined 1.5%. Major decliners included Meituan and Xiaomi, while gainers included China Resources Power and Cnooc.
Japanese stocks ended lower amid cautious sentiment over potential Bank of Japan rate increases and a rebounding yen. The Nikkei Stock Average declined 1.1%, with notable drops in Mitsubishi Motors, Isuzu Motors, and Sumitomo Realty & Development.
Indian shares closed lower, impacted by finance and bank stocks amid concerns over the budget plan and proposed higher capital gains taxes. The benchmark Sensex declined 0.35%, though Tech Mahindra and Tata Motors saw gains.
Asian shares were hit hard on Thursday as a global tech slump sent investors fleeing to safer assets like short-dated bonds, the yen, and the Swiss franc. Chinese stocks received little support despite a surprise rate cut by the central bank. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.7%, with Japan's Nikkei tumbling 2.9% and South Korea's KOSPI dropping 2%.
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The S&P 500 Index continued to climb to record highs, although the market’s gains remained notably narrow. As measured by Russell 1000 indexes, growth shares outperformed value stocks by 415 basis points (4.15 percentage points), while the small- and mid-cap benchmarks recorded losses.
The technology-heavy Nasdaq Composite ended the week 73.71% off its lows since the market began its rebound in mid- to late-2022, while the more value-oriented and narrowly focused Dow Jones Industrial Average had gained less than half of that amount, 32.79%. Markets were closed Thursday in observance of the Independence Day holiday, and T. Rowe Price traders noted lighter trading volumes as the week progressed.
Expectations for lower interest rates, fed by signs of weakening growth and easing inflation pressures, seemed to remain a major factor in favoring growth stocks by placing a lower implied discount on future earnings. On Monday, the Institute for Supply Management (ISM) posted its lowest reading of manufacturing activity (48.5, with levels below 50.0 indicating contraction) since February. A separate reading also showed a surprise contraction in construction activity.
While the thought of a slowing economy and a potential recession can be concerning, it is important to remember that they are a natural part of every economic cycle and set the stage for the next growth phase. Fortunately, with the slow unwinding of inflation over the past two years, the Fed should have more room to cut rates, which we believe will shorten the length and severity of a potential recession and help contain the slowdown.
In local currency terms, the pan-European STOXX Europe 600 Index ended 1.01% higher. Political jitters eased as the far right in France failed to win an outright majority in the first round of legislative elections on June 30. Meanwhile, the Labour Party won the UK general election on July 4 with a large majority. Major stock indexes also rose, with France’s CAC 40 Index climbing 2.62%, Germany’s DAX gaining 1.32%, and Italy’s FTSE MIB putting on 2.51%. The UK’s FTSE 100 Index added 0.49%.
A final estimate of eurozone inflation confirmed that the year-over-year change in consumer prices ticked lower in June to 2.5%. However, a crucial services component remained stubbornly high, likely reinforcing the ECB’s case for caution.
Japan’s stock markets gained ground, with the Nikkei 225 Index climbing 3.36% and the broader TOPIX Index advancing 2.65% in local currency terms. Both indexes hit all-time highs during the week, propelled in part by weakness in the Japanese yen, which is typically a tailwind for export-focused industries. The yen strengthened a bit later in the week. In the first three months of the year, Japan’s economy shrank by 2.9% year over year, a sharper contraction than the first estimate that put the decline in gross domestic product (GDP) at 1.8%. The government attributed this revision to corrections in construction orders. The annualized change in GDP was also lowered for the fourth and third quarters of 2023.
Chinese equities fell as underwhelming manufacturing data reinforced concerns about the slowing economy. The Shanghai Composite Index and the blue chip CSI 300 both registered modest losses for the week. In Hong Kong, the benchmark Hang Seng Index gained 0.46% during a holiday-shortened week.
The value of new home sales by the country’s top 100 developers fell 17% in June from the prior-year period, easing from a 34% decline in May, according to the China Real Estate Information Corp. The data boosted hopes that China’s housing market, now in its fourth year of a downturn, may start to gain traction after the government announced a sweeping rescue package in May. China's manufacturing sector shrank in June for the second consecutive month, government data showed. The official manufacturing purchasing managers’ index (PMI) reached 49.5 in June, unchanged from May, as new orders and exports declined. The data reflected the uneven performance of China’s economy this year amid a yearslong property slump that has hit domestic consumption and rising trade tensions that threaten the manufacturing sector.
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Written by Xia Yunchu
Labor Market Recovery: The US economy added 559,000 jobs in June 2024, beating expectations. The unemployment rate declined to 3.8%, signaling a robust labor market recovery. However, wage growth remains moderate, and some sectors face labor shortages. Consumer Slowdown: Recent data shows a slowdown in US retail sales. Consumers are becoming cautious due to rising inflation, supply chain disruptions, and uncertainties related to the pandemic. This trend could impact economic recovery and corporate profits.
Fiscal Challenges: The Eurozone faces fiscal challenges stemming from an aging population. As birth rates decline, the proportion of elderly citizens increases. This puts pressure on pension systems and healthcare budgets. Policymakers must find sustainable solutions to support retirees and maintain economic stability. Tight Labor Market: Despite demographic challenges, the Eurozone's labor market remains tight. Skill shortages persist in certain sectors, leading to wage pressures and potential productivity bottlenecks.
Inflation Insights: Japan and the United Kingdom are experiencing easing underlying inflation. This suggests that supply chain disruptions and energy price spikes may be temporary. However, central banks remain vigilant, closely monitoring inflation data to guide monetary policy decisions. Global Markets Monitor: APAC markets are closely watching upcoming elections (such as India's state elections) and inflation data. Investors are also awaiting Friday's release of the US Personal Consumption Expenditures (PCE) inflation index, which could impact the Federal Reserve's interest rate trajectory.
Written by Erika Lau
As of Friday close: S&P500: 5432 (+1.6%) ; NADQ Comp: 17688 (+3.2%) ; S&P mid-cap 400: 2895 (-0.8%) ; Russell2000: 2006 (-0.01%) S&P500 and NADQ touched new highs pushed by AI enthusiasm and technology-related stocks, while small and mid-cap underperformed over the week. Core inflation fell to 3.4%, the lowest since April 2021. The Producer Price Index (PPI) inflation, which was announced on Thursday, came as a surprise by declining 0.2%, contrary to expectations of a slight increase. Furthermore, on a year-over-year basis, the core PPI decreased to 2.3%, putting an end to five consecutive months of growth. In a related trend, import prices also experienced a decline of 0.4% in May, marking their first decrease in four months. 10-year treasury yield decreased from 4.43% to 4.21% after higher-than-expected jobless claims built inflation pressure. IG corporate bond market was quiet over the week as investors awaited inflation release and Fed’s meeting.
In Japan, the stock markets had a mixed performance for the week, with the Nikkei 225 Index gaining 0.3% while the broader TOPIX Index declined by 0.3%. The Bank of Japan’s (BoJ) June meeting had a dovish tone, which supported the equity market. In the fixed income markets, the yield on the 10-year Japanese government bond (JGB) decreased to 0.93% from 0.98% the previous week. The Japanese yen, already at historically low levels, weakened further against the US dollar, with the exchange rate reaching around JPY 157.5 from 156.6.
Chinese equities faced a decline during a short week, reflecting ongoing deflationary pressures impacting the economy. The Shanghai Composite Index dropped by 0.61%, while the blue chip CSI 300 decreased by 0.91%. In Hong Kong, the Hang Seng Index fell by 2.31% according to FactSet. Chinese markets were closed on Monday for the Dragon Boat Festival. China’s consumer price index showed a modest increase of 0.3% in May compared to the previous year, matching April’s rise. Core inflation, which excludes volatile food and energy prices, grew by 0.6%, slowing down from April’s 0.7% increase. On the other hand, the producer price index experienced a 1.4% decline compared to the previous year, marking its 20th consecutive month of decline. However, this decline was less severe than the 2.5% drop seen in April. Despite Beijing’s efforts to stimulate the economy and stabilize the markets, weak consumer confidence and a prolonged slump in the property sector have kept prices in China under pressure.
JP 1Q GDP: -0.5%, meet est. of -0.5%, down from prev. 0.1% JP Interest rate: 0.1%, meet est. of 0.1%, same as prev. UK GDP MoM: 0%, meet est. of 0%, down from prev. 0.4% US Core CPI MoM: 0.2%, miss est. of 0.3%, same as prev. US PPI MoM: -0.2%, miss est. of 0.1%, down from prev. 0.1% US Crude Oil Inventories 3.7M, beat est. of -1.2M, up from prev. 1.2M US Interest rate: 5.5%, meet est. of 5.5%, same as prev. US Initial jobless claims: 242K, miss est. of 225K, up from prev. 229K
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Written by Dacian Deng
The U.S. market experienced mixed results as longer-term bond yields fell. The S&P 500 and Nasdaq Composite reached record highs, while smaller-cap indexes pulled back. Growth stocks outperformed value shares due to falling interest rates. However, the artificial intelligence (AI) sector saw some slowdown as U.S. officials slowed the issuance of licenses for AI chip sales to the Middle East and opened antitrust investigations into Microsoft and NVIDIA.
The major indexes had varied performances for the week, with the DJIA up 2.94%, S&P 500 up 12.10%, Nasdaq Composite up 14.13%, S&P MidCap 400 down 5.00%, and Russell 2000 down slightly by 0.03% year-to-date.
Despite positive data indicating a potential recovery in the property sector, stocks in China experienced a decline. The Shanghai Composite Index dropped 1.15%, while the CSI 300 Index fell by 0.16%. In contrast, Hong Kong's Hang Seng Index rose 1.59%.
In economic news, the private Caixin/S&P Global survey showed a slight improvement in manufacturing activity, with a reading of 51.7 in May compared to 51.4 in April, indicating the seventh consecutive month of expansion. The Caixin services purchasing managers' index also exceeded expectations, reaching 54 in May, up from 52.5 in April. This private survey focused on smaller and export-oriented firms, adding to official data from the previous week, which showed an unexpected contraction in manufacturing activity in May.
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Written by Erika Lau
US ended higher for the week as it tapped into the second week of the earnings release. A cooler labor market, as indicated by lower-than-expected nonfarm payrolls, lowered the inflationary pressure and gave investors a greater hope of loosening interest rates. Powell’s response to the data also pushed back stagflation worries which further encouraged investors.
For individual stocks, AAPL beat consensus revenue expectations and announced the largest buyback of 110bn USD helped boost investors’ confidence. TSLA also lifted the market after a 15% rally under China’s tentative approval of the self-driving technology.
Europe ended lower amid mixed earnings and an unsure interest rate outlook. The German DAX index experienced a decrease of 0.88%, while France’s CAC 40 Index saw a decline of 1.62%. Italy’s FTSE MIB index also weakened, with a decrease of 1.81%. In contrast, the UK’s FTSE 100 Index registered a gain of 0.90% and reached a new high, primarily fueled by the robust performance of mining and energy stocks.
Chinese stocks rose during a week as investors expressed optimism regarding increased government assistance that China would utilize various monetary policy tools, such as potential interest rate reductions and adjustments to the reserve requirement ratio. SSEC rose by 0.52%, while the prominent CSI 300 index of blue-chip stocks saw a slight gain of 0.56%. A larger rally in Hong Kong with the surge of HSI by 4.67%.
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Written by Leo Xu Mingyuan
Stocks recorded their third consecutive week of broad losses, as concerns over tensions in the Middle East and the possibility of U.S. interest rates remaining high. Mega-cap technology shares lagged as rising rates placed a higher theoretical discount on future earnings.
Some strong economic data appeared to increase worries that the Federal Reserve would push back any interest rates cuts to the fall, if not to 2025. On Monday, the Commerce Department reported that retail sales rose 0.7% in March, well above consensus expectations of around 0.3%, while February’s gain was revised upward to 0.9%. The retail sales data helped push the yield on the benchmark 10-year U.S. Treasury note to its highest intraday level since last November.
Fed officials expressed their concern with recent economic data. On Tuesday, Fed Chair Jerome Powell stated at an economic conference that "recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve that confidence."
Consumer prices in the UK grew an annual 3.2% in March, down from 3.4% in February. Although the inflation rate fell to its lowest level in two and a half years, the decline was slightly less than forecast by Bank of England (BoE) due to elevated price growth in fuel and communication goods. Higher oil prices and the somewhat sticky inflation data prompted financial markets to push out expectations for a first cut in UK interest rates from June to sometime in the fall.
European Central Bank (ECB) policymakers at the IMF meeting reiterated that June was the likely target date for lowering borrowing costs, barring unexpected economic shocks. Three to four rate cuts this year priced in by markets were in line with the bank’s economic outlook.
Chinese equities rose after the economy expanded more than expected in the first quarter. The Shanghai Composite Index gained 1.52%, while the blue chip CSI 300 added 1.89%. In Hong Kong, the benchmark Hang Seng Index gave up 2.89% as escalating geopolitical tensions in the Middle East hurt investor sentiment.
China’s gross domestic product expanded an above-consensus 5.3% in the first quarter from a year ago, accelerating slightly from the 5.2% growth in last year’s fourth quarter. On the monetary policy front, the People’s Bank of China injected RMB 100 billion into the banking system via its medium-term lending facility compared with RMB 170 billion in maturing loans and left the lending rate unchanged, as expected. The operation resulted in a net withdrawal of RMB 70 billion from the banking system, marking the second cash extraction this year.
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Written by Jonathan Chen
While the S&P 500 ended a record-setting streak by falling just below the flatline, it still managed to secure a win for the week. The Dow Jones Industrial Average saw a slight increase of about 0.2%, whereas the tech-heavy Nasdaq Composite experienced a minor drop close to 0.4%. This mixed closing was amid investors bracing for the Fed's upcoming meeting, focusing on potential rate cuts and the central bank's latest viewpoint on inflation and economic growth.
The week also highlighted anticipation for major tech companies' earnings reports, with Alphabet and Microsoft set to start the earnings season. These reports are keenly watched due to the significant influence these companies have on both the global economy and investors' portfolios.
Furthermore, the US market witnessed crude oil gaining more than 6% over the week, driven by bullish economic data and ongoing tensions in the Red Sea region. This rise in oil prices was supported by freezing temperatures affecting US production, a reduction in crude inventories, and various global economic factors.
The Swiss National Bank made a surprise interest rate cut, becoming the first major financial center to do so recently. Investors were also anticipating major economies' manufacturing PMI and CPI data as they continue to address inflation concerns.
Additionally, European stocks experienced mixed movements, with the tech sector influencing Wall Street's performance and Bitcoin's value jumping significantly. The Dutch TTF benchmark for European gas prices saw a significant decrease, suggesting a possible easing of the energy crisis.
Chinese regulators reportedly blocked Syngenta's planned $9bn Shanghai IPO due to liquidity concerns. Indian stocks did not experience the traditional pre-election rally as the country prepares for parliamentary elections; US yields and a significant earthquake impacted markets like Nikkei and Hang Seng. Meanwhile, China's solar sector is facing oversupply and low prices, suggesting a year of consolidation ahead.
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Written by Kevin Xia
Oil Prices Rise on Strong Global Demand and Fed Rate Cut Expectations: Oil prices rose on March 13, 2024, on expectations of strong global demand, including in the United States, and as even somewhat sticky U.S. inflation did not dent expectations the Fed might start cutting rates soon. Brent futures for May delivery were up 36 cents, or 0.44%, at $82.28 a barrel.
US Consumer Prices Rise: The consumer price index increased 0.4% for the month of February and 3.2% from a year ago. The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.
US Fed: The Federal Reserve held its key interest rate steady Wednesday for the fifth consecutive meeting, as the central bank awaits more data to determine when to cut rates.
European and US Equity Futures Trade Higher: On March 18, 2024, European and US equity futures traded higher following a selloff in equities and bonds when markets rounded off a week that saw hot inflation concerns roiled markets.
Europe's Worst Earnings Season Since Covid: Europe had its worst earnings season since the onset of Covid.
Red Sea Situation and Fruit Exports: Maersk's March 2024 market update covered the Red Sea situation, fruit exports, port updates, inland solutions, labor regulations, and last-mile strategies.
Eurozone Inflation Drops to 2.4%: The European Central Bank (ECB) was slower to raise interest rates, but that did not stop eurozone inflation from dropping to 2.4%, just above the 2% target rate.
Asia Markets Fall Ahead of Central Bank Interest Rate Decisions: On March 18, 2024, Asia-Pacific markets fell ahead of central bank monetary policy decisions from the Bank of Japan and the Reserve Bank of Australia. Asian Markets Mixed Ahead of Bank of Japan Decision: On March 19, 2024, Asian markets were mixed ahead of a much-anticipated Bank of Japan meeting.
Written by Erika Lau
The U.S. stock market mostly ended higher for the week, driven by favorable inflation news. The Nasdaq Composite and S&P 500 reached record levels, with the S&P 500 having its strongest start to the year since 2019. The gains were broad-based, with an equal-weighted version of the S&P 500 outperforming the market capitalization version. Large, technology-oriented growth stocks continued to outperform, contributing to the overall performance.
The release of the Commerce Department’s core personal consumption expenditures (PCE) price index, which is considered the Federal Reserve’s preferred measure of inflation, helped boost market sentiment. The index rose 2.8% for the 12 months ended in January, in line with expectations, alleviating concerns raised by the Labor Department’s consumer price index, which showed higher-than-expected core prices. Despite the positive reaction in the stock market, Federal Reserve policymakers maintained their stance of not rushing to cut interest rates.
The manufacturing sector, however, surrendered some of its recent momentum, with the Institute for Supply Management’s (ISM) gauge of manufacturing activity falling below expectations in February. Durable goods showed a more positive outlook, and personal incomes saw a significant increase in February.
The yield on the 10-year Treasury note reached its lowest level in weeks, reflecting the positive reaction to the PCE data and the downside surprise in the manufacturing sector. U.S. Treasuries generated positive returns as yields decreased, and municipal bonds received an additional boost from light issuance.
In the investment-grade corporate bond market, spreads widened due to heavy supply, as February saw a record-breaking amount of new issuance. High yield market trading activity was subdued early in the week but tightened credit spreads following the release of the core PCE price data.
Overall, the U.S. stock market experienced gains, driven by positive inflation news, while the manufacturing sector showed a slight decline. Bond markets reacted positively to the economic data, and corporate bond issuance reached a new record in February.
