This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.
Global stock markets rallied on Friday, with Wall Street crowning November with its biggest monthly gain in a year on post-election growth hopes, while the dollar eased amid prospects for firmer rates in Japan and easing in Europe. MSCI’s broad gauge of world stocks rose 0.52%, securing the best month since May, up 3.63%. Europe’s STOXX share index rose 0.58% on the day and was up 0.96% across the month, recording its first monthly gain since August. Technology stocks were the biggest boost to the index, gaining 1.6 per cent.
Of course, U.S. trading was thin the day after Thanksgiving. Many investors made it a long weekend and stocks and bonds closed early, so most month-end position adjustments were done before the holiday. The S&P 500 rose 0.56% to mark the best monthly gain since November 2023 of 5.14%, as investors ploughed $US141 billion into US equities, the heaviest inflows for a four-week period on record, according to EPFR Global data. The US is currently an investor magnet. Nvidia and Apple helped pace the S&P 500 to its 53rd record closing high at 6032.38. The DOW was up 0.42% on the day and 7.54% for the month. The Nasdaq’s 0.83% rise Friday secured a 6.2% gain for the month, it’s best since May.
The stars of the month, though, have been the small-cap stocks, with the Russell 2000 index being very close to achieving the second 10%+ monthly return of 2024. This small-cap index, often seen as a “risk-on” gauge, has broken through key resistance levels and reversed its underperformance trend versus the broader market. This rotation suggests increasing participation across sectors and a broadening of market strength, reinforcing the bullish market thesis.
In Europe, auto stocks were among the worst hit in November, knocked down by concerns that U.S. President-elect Donald Trump’s proposed tariffs on Mexico could be more damaging for European car makers than any direct tariffs on EU goods. Defence stocks on the other hand, gained the most among sectors, largely due to the Russia-Ukraine conflict.
Speculation about Japanese rate hikes drove a rebound for the yen, which ended with the biggest weekly gain vs the USD since July. The dollar fell 1.18% on the day to 149.76 yen, under pressure after Japan’s government finalised a stimulus budget and inflation in Tokyo came in hotter than economists forecast.
ASX property stocks were the worst performing, sliding 0,7 per cent. Goodman Group shares dropped 0.8 per cent to $37.91 and Westfield parent Scentre was down 1.1 per cent to $3.68.
The falls come as economists from three Australian banks – ANZ, AMP and Bank of Queensland – push out their forecast for a first cut from the Reserve Bank of Australia to May, from February previously.
In cryptocurrencies, Bitcoin briefly traded above $US98,600 btu was last at $96,534. Regardless of the current price level, some predict significant growth is possible with growth through the remaining days of 2024 to hit a high of $200,000. This is of course the point, markets can hope, but Bitcoin and the markets more widely continue to be driven on hopium. Just don’t look down.
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