This is our weekly market update, starting in the US, crossing to Europe and Asia, and ending in Australia. Markets continue to drive higher, though with significant volatility as Geo-political issues in places like France, Korea, the middle east and Ukraine collide with questions of interest rate trajectory, the AI boom and Trump’s ongoing announcements of more names into his team.
Investors can savor the current market momentum but should prepare for a potential shift after January’s inauguration of Donald Trump, Tom McClellan said in a new Market Report. This shift in sentiment, is tied to uncertainty surrounding a new administration’s policies and the inevitable political battles with Congress. “Wall Street hates unknowns,” he emphasized.
The MSCI Global index of stocks was up 1.3% across the week, and up 20.18% year to date. The STOXX 600 was up 2% across the week logging its seventh consecutive day in advances and its strongest weekly performance in ten, and is up 8.65% year to date, while the S&P 500 advanced modestly early and mostly held those gains into the closing bell in New York, for its 57th record closing high this year up 0.96% across the week and 27.68% year to date. The VIX was trading below 13, while Bitcoin briefly edged back below 100,000.
Markets are expecting the FED to cut rates again at its December meeting, after the US economy added 227,000 jobs last month, mostly in line with expectations, and the three-month average came in at 173,000, confirming expectations that the labour market is cooling, at a moderate pace.
The Australian sharemarket dropped on Friday in a broad sell-off as investors turned cautious ahead of a key job report in the US that may shed light on whether the Federal Reserve will continue easing interest rates this month.
The big banks had a weak session with Westpac down 1.4 per cent to $32.76, while Commonwealth Bank fell 0.6 per cent to $157.06. That’s despite traders ramping up bets of an earlier rate cut by the Reserve Bank. Money markets imply an around 50-50 chance of an easing in February 2025, up from 25 per cent on Tuesday. The central bank is widely expected to keep the cash rate at 4.35 per cent when it meets next week.
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