Market update: 10 December 2024
The ASX 200 ended the week slightly down, dipping 0.2%, as investors navigated mixed economic signals. Strong October retail sales (+0.6% Month on Month) early in the week suggested rates might stay on hold longer. However, weaker-than-expected Q3 GDP growth of just 0.3% brought forward market expectations of an RBA rate cut to April. The Australian dollar saw some recovery alongside busy trading activity driven by block trades.
In the U.S., markets were mixed. The Nasdaq surged 3.3% and the S&P 500 gained 1.0%, while the Dow Jones dipped 0.6%. Encouraging data from Black Friday spending and Thanksgiving travel signalled resilient consumer demand heading into the holiday season. With next week’s CPI release in focus, markets are pricing in an 85% chance of a 25bps rate cut in December.
European equities posted strong gains, with the Euro Stoxx 50 up 3.6%. Optimism around potential ECB rate cuts and OPEC+ extending oil production cuts supported the market. Meanwhile, political challenges in France were overshadowed by optimism about a potential budget agreement in parliament.
In Asia, Greater China markets rallied, with both the Shanghai Composite and Hang Seng up 2.3%. Investors positioned for further stimulus at next week’s Central Economic Work Conference, with expectations that the PBOC may introduce its largest rate cuts in a decade next year. However, tensions rose as China announced retaliatory export controls on U.S. products in response to new U.S. restrictions on China’s chip industry.
Japan’s Nikkei climbed 2.3% for the week, buoyed by better-than-expected household spending and steady wage growth.
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