Global News Summary 18–23 November 2024
Global markets demonstrated resilience amid geopolitical and economic challenges. The US economy showed robust activity, with PMI reaching a 19-month high, although recession risks increased to 75% as analysts assessed the potential impact of incoming fiscal policies. The S&P 500 gained modestly, led by small-cap outperformance, while Nvidia’s disappointing forecast underscored market fragility. In the UK, inflation pressures persisted, prompting cautious fiscal reforms. The Eurozone faced contraction risks, with Germany’s GDP forecast to shrink in 2024, while the ECB warned of a potential tech bubble driven by AI overvaluation. Japan saw slight yen stabilisation, China reported stronger retail and industrial output, and Australia’s labour market held steady. Bitcoin neared the $100,000 milestone, buoyed by institutional interest, while commodities such as crude oil and gold recorded gains, reflecting mixed global sentiment.
United States:
• Economic Growth: The US economy displayed resilience, with the composite PMI rising to 55.3 in November, the highest since April 2022, signalling robust economic activity.
• Market Dynamics: The S&P 500 rose by 0.3%, with small-cap stocks (Russell 2000) outperforming, gaining 4.5% over the week. The Nasdaq 100 lagged, weighed down by Nvidia’s disappointing revenue forecast.
• Debt Securities: Treasury yields remained volatile, with the 10-year yield stabilising at 4.41%.
• AI Influence: Nvidia’s earnings results were a major market driver, underscoring the sector’s influence on equity performance.
• Inflation and Recession Risks: Recession probability increased to 75% within the next 12 months, amid concerns about tariffs and fiscal policies under the incoming administration.
United Kingdom:
• Inflation Concerns: UK inflation rose slightly in October, reflecting a pause in the global disinflationary trend.
• Policy Updates: Chancellor Reeves announced pension reforms aimed at unlocking £80 billion in investments while avoiding mandates forcing funds into UK assets.
Eurozone:
• Economic Slowdown: Eurozone PMI signalled contraction, reflecting persistent economic weakness. Germany’s GDP is projected to shrink by 0.1% in 2024.
• Debt Concerns: ECB Vice President Luis de Guindos highlighted sovereign debt risks that could hinder long-term economic planning.
• AI and Tech Bubble Risks: The ECB raised concerns about overvaluation in US tech stocks and potential AI-driven asset price bubbles.
Japan:
• Yen Movements: The yen stabilised at ¥154.82 per dollar, recovering slightly after previous declines.
• Economic Data: Input prices rose by 3.4% in October, reflecting inflationary pressures aligned with the Bank of Japan’s policy goals.
China:
• Economic Recovery: Industrial output and retail sales grew faster in October, supported by government policies to bolster housing and consumer spending during Golden Week.
• AI Expansion: Chinese tech firms expanded hiring in the US, seeking to strengthen global competitiveness despite geopolitical tensions.
Australia:
• Labour Market: Employment rose by 15,900, with the jobless rate steady at 4.1%. Easing wage growth signalled a potential pause in interest rate adjustments by the RBA.
Canada:
• Inflation: Persistent inflationary pressures reduced the likelihood of aggressive rate cuts by the Bank of Canada.
Cryptocurrencies:
• Bitcoin: Bitcoin surged close to $100,000, driven by institutional interest and regulatory optimism under the crypto-friendly Trump administration.
Global Trends:
• Commodities: WTI crude oil rose by 1.5% to $71.18 per barrel, while gold climbed by 1.4% to $2,706.96 per ounce, marking its strongest weekly performance since March 2023.
• Market Outlook: Equities demonstrated strength, but risks from fiscal policies, geopolitical tensions, and overreliance on key stocks like Nvidia raised caution for the coming months.