Weekly Overview 11. – 17. Nov 2024

The content of this post does not constitute financial advice. It is intended for information and education purposes only.

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The Week in Global Markets

Financial markets summary:

– EUROPE: We had another disappointing week of stock market performance in Europe where almost all major country indices, with the exception of Italy’s FTSE MIB, and the main pan-European Stoxx indices fell. This was likely due to continuing pessimism in the wake of the US election and its implications for the European economy, as well as a bigger-than-expected drop in industrial production both YoY and MoM, despite positive GDP growth in real terms. The ZEW indicators show that sentiment deteriorated further in November, for both Germany and the EU. Assessments of the current economic situation in Germany have turned more pessimistic, while economic expectations are in decline after Trump’s victory and the collapse of the German government coalition. Public and financial institutions are downgrading the expectations for the German economy, with negativity prevailing. The UK economy also suffered an unexpected slump, with GDP falling MoM, while still growing QoQ and YoY. This week both the euro and the British pound depreciated against the US dollar, both falling over 2.4%.

– UNITED STATES: With the political statements and appointment announcements made by Donald Trump this week, US stock markets reacted with mixed feelings. We see positioning for better earnings in the financial and energy sectors, while stocks in the healthcare and EV companies declined on negative sentiment related to the removal of tax credits and the appointment of a strong critic of US health programs and the pharmaceutical industry. On the macro front, both headline and core consumer inflation readings for October came in line with expectations, but the former was higher than the September numbers. Producer prices rose slightly more than expected year-on-year but were aligned with expectations on a monthly basis. And while retail sales delivered a positive surprise for October, industrial production and capacity utilization kept shrinking.

– ASIA-PACIFIC: In Japan, both the Nikkei 225 and the TOPIX stock indices declined week-on-week. The summary of opinions from last month’s meeting of the Bank of Japan confirmed that, if prices and economic activity develop as anticipated, the bank will likely raise the policy interest rate gradually so that the rate will reach 1% sometime in the second half of 2025 at the earliest. The yield on the 10-year Japanese government bond rose to 1.07% as the yen weakened further, surpassing the 156 mark. Real GDP growth slowed both on a quarterly and annual basis. In China, stocks are still declining, with both the Shanghai Composite Index and the CSI 300 falling week-on-week on stubborn deflation concerns. Retail sales rose more than expected in October, but industrial production was below the consensus forecast. The decline in new home prices continues to slow down, likely as a result of the stimulus measures.

– BITCOIN: BTC reached another all-time high this week against the USD – $93,434, before stabilizing in a range around the $90k mark. Many analysts (as well as prediction markets) expect that $100k is now imminent (e.g., odds for reaching that milestone before year-end are now at around 38%), although enthusiasm seemed to wane in the last several days. Altcoins have also been catching up, but most did not make new peaks. On November 13th, Spot Bitcoin ETF IBIT saw over $5bn in daily volume for the first time in history.