Market update: 3 December 2024
The ASX 200 had a steady week, rising 0.5% and setting two record highs early on. Markets cooled slightly towards the end of the week as economists pushed their forecast for the first RBA rate cut from February to May. This shift followed a core CPI reading that climbed to 3.5% year on year, up from 3.2%, keeping inflation at the forefront of the RBA’s concerns. The Australian dollar also saw some action, recovering to US65.12c after dropping to a four-month low earlier in the week.
In the U.S., a holiday-shortened week saw markets post solid gains. The Dow Jones rose 1.4%, while the S&P 500 and Nasdaq each added 1.1%. President-elect Trump’s announcement of new tariffs on China, Mexico, and Canada grabbed headlines, but markets remained upbeat as October core PCE inflation met expectations at +0.3% month on month, and personal income and spending data exceeded forecasts.
European equities ended the week higher, with the Euro Stoxx 600 up 0.4% and the FTSE and Euro Stoxx 50 both climbing 0.3%. Gains were supported by defensive stocks, though political turmoil in France and concerns over U.S. trade policy kept sentiment cautious. Eurozone inflation rose above the ECB’s 2% target, raising speculation about upcoming monetary easing.
In Asia, Greater China markets finished strong despite early-week volatility. The Shanghai Composite and Hang Seng rose 1.8% and 1.0%, respectively, as hopes of economic support from the upcoming Central Economic Work Conference buoyed sentiment. However, concerns over trade tensions with the Trump administration and underwhelming earnings from China’s tech giants kept gains in check. Japan’s Nikkei slipped 0.2%, weighed down by a weaker Yen and mixed macro data, including better-than-expected Tokyo CPI but softer retail sales and industrial production.
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