Market update: 12 November 2024
Global markets showed resilience this week, buoyed by easing election uncertainty in the U.S. and positive economic data. The ASX 200 rose 2.2%, with 9 out of 11 sectors posting gains, led by Technology (+5.8%), Industrials (+3.7%), and Financials (+3.6%). The Reserve Bank of Australia kept rates steady at 4.35% in light of high underlying inflation. RBA Governor Bullock noted that the market’s expectations of rate cuts beginning in mid-2025 are generally in line with current economic indicators.
In the U.S., markets saw notable gains following a 25bps rate cut by the Federal Reserve, with the Nasdaq, S&P 500, and Dow Jones rising 5.7%, 4.7%, and 4.6%, respectively. Additional rate cuts remain on the table, with markets pricing in a 65% chance of another 25bps cut in December. This environment has particularly benefited small-cap companies, which led the rally with a 6.1% gain, as they tend to be more sensitive to borrowing costs.
European markets, however, were subdued, with the Euro Stoxx 50, FTSE, and Euro Stoxx 600 posting weekly declines as investors assessed a mix of economic signals and corporate earnings. Despite an initial rally midweek, equities faced downward pressure, reflecting ongoing caution around trade policies and other macroeconomic factors.
In Asia, Chinese markets bounced back after initial declines, with the Shanghai Composite and Hang Seng ending the week up 5.5% and 1.1%, respectively. China’s October export growth significantly outpaced expectations, providing a welcome boost. Further optimism came from the announcement of a RMB10tn debt relief package aimed at easing local government financing pressures. Japan also ended the week higher, with the Nikkei up 3.8% as its banking sector performed well amid a stable domestic policy outlook.
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