The week wrapped up with a mix of trading in the stock market, as US and European benchmarks reached new records and the yen made gains following the Japanese election results. The Stoxx 600 index in Europe saw a slight increase, marking its best weekly performance since mid-August, driven by China’s economic support pledges that boosted luxury and mining stocks. US futures dipped slightly after the S&P 500 closed at its 42nd record high this year. The dollar and US Treasury yields remained steady.
China’s continued economic support announcements, alongside expectations for more interest rate cuts from the Federal Reserve and the European Central Bank, have encouraged risk appetite in the markets. Investors are eagerly awaiting the release of the Fed’s preferred inflation indicator and consumer demand data for further insight on potential rate changes.
The yen strengthened against the dollar as Shigeru Ishiba won the leadership vote for Japan’s ruling party, signaling support for the Bank of Japan’s gradual rate hike plan. On the other hand, European bond yields and the euro dropped after lower-than-expected inflation figures from Spain and France, leading to expectations of more aggressive rate cuts by the ECB.
Chinese markets rallied this week, with the CSI 300 Index jumping 4.5% and experiencing its best week since 2008. The People’s Bank of China implemented a bold stimulus package to boost the slowing economy and investor confidence. However, the Shanghai Stock Exchange faced technical glitches and delays in processing orders.
As for commodities, oil prices stabilized after a sharp decline, while gold saw a third consecutive weekly gain on expectations of continued interest rate cuts by the Fed.
Looking ahead, key events to watch out for include Eurozone consumer confidence data and US PCE and University of Michigan consumer sentiment reports. Overall, analysts like Nataliia Lipikhina, JPMorgan Private Bank’s head of EMEA equity strategy, remain optimistic about the European and US markets in the coming months, citing strong fundamentals despite central bank easing measures.
Keep an eye on market movements, as central banks continue to play a significant role in influencing investor sentiment and market dynamics. Stay informed with Extreme Investor Network for more insights and analysis on the latest financial trends and developments.