The global financial markets witnessed a mix of volatility, optimism, and regional economic shifts during the week. In the United States, the stock market faced turbulence after a strong rally in previous weeks.
- U.S. Stock Performance: On December 9, the S&P 500 declined 0.4%, while the Nasdaq Composite fell 0.5%. This downturn stemmed largely from profit-taking and concerns about major tech players like Nvidia, which faced scrutiny from Chinese regulators for potential antitrust violations.
- Tech Sector Resilience: Despite Nvidia’s challenges, technology stocks remained a focal point. Companies like MongoDB rose over 9% following an improved earnings outlook, signaling selective optimism among investors.
Economic indicators added a layer of positive sentiment. The November jobs report, released during the week, showed that U.S. employers added 227,000 jobs, exceeding expectations. This fueled hopes of an interest rate cut by the Federal Reserve in its December 18 meeting, especially as inflation data remained steady.
United States
The U.S. economy was under the microscope, with key data and policy updates influencing investor behavior:
- Core Inflation: On December 11, the Consumer Price Index (CPI) showed core inflation rising 0.3% MoM and maintaining an annual rate of 3.3%. This data played a critical role in shaping expectations for the Federal Reserve’s next move.
- Retail Sales: The Census Bureau reported a 0.5% increase in retail sales for November, underscoring strong consumer spending ahead of the holiday season.
- Jobless Claims: Initial jobless claims rose slightly to 224,000, while continuing claims fell, reflecting a broadly stable labor market.
- Producer Price Index (PPI): Released on December 13, the PPI increased 0.2% MoM, with core PPI (excluding food and energy) climbing 0.3%. This data indicated moderate wholesale price pressures.
Australia
Australian markets reflected global trends while grappling with regional concerns.
- Interest Rate Sentiment: On December 9, analysts noted a shift in expectations for the Reserve Bank of Australia (RBA), with odds of a rate cut in February rising to 75%. This shift came after dovish signals from the RBA.
- Stock Market Performance: The ASX fell for the fourth consecutive week, driven by weakness in commodity prices and concerns over economic conditions.
- Commodity Impact: Reports indicated that falling commodity prices would likely weigh on Australian producers, threatening profitability in the resource-heavy economy.
New Zealand
Key financial and economic updates shaped New Zealand’s outlook:
- Air New Zealand Results: On December 10, Air New Zealand reported earnings before taxation of $222 million, down from $574 million the previous year. The decline was attributed to increased competition and operational challenges, though passenger revenue rose 11% to $5.9 billion.
- Global Dairy Trade (GDT): The GDT price index, released December 11, reflected fluctuations in global dairy prices, a critical factor for the nation’s export-driven economy.
Canada
Canada’s economic landscape shifted with significant policy developments.
- Rate Cut Decision: On December 11, the Bank of Canada reduced its key policy rate by 50 basis points to 3.25%. This move aimed to support economic growth amid slowing momentum and rising inflationary concerns.
- Upcoming Economic Statement: Finance Minister Chrystia Freeland announced that the Fall Economic Statement will be tabled on December 16. The statement is expected to address fiscal challenges and growth initiatives. Deputy Prime Minister Freeland reiterated the government’s focus on stimulating investment and innovation as part of its broader economic strategy.
Switzerland
Swiss economic updates reflected resilience alongside ongoing external concerns:
- SNB Bulletin: On December 11, the Swiss National Bank released its quarterly bulletin, forecasting inflation to remain within target levels but cautioning against external risks.
- Economic Forecasts: The State Secretariat for Economic Affairs (SECO) projected modest growth for 2025, driven by stable labor markets and recovering external demand.
- Trade Balance: Switzerland’s trade balance, released December 13, showed strong exports in pharmaceuticals and machinery sectors, contributing positively to the economy.
Japan
In Japan, economic indicators and policy developments shaped market sentiment:
- Mizuho Bank Lending Rate: On December 9, Mizuho Bank raised its long-term prime lending rate to 1.9%, reflecting adjustments to evolving economic conditions.
- Tankan Survey: The Bank of Japan’s (BOJ) survey, published December 13, showed improved business sentiment among large manufacturers, hinting at resilience in the industrial sector.
- Energy Policy Update: The Japanese government unveiled plans to maximize nuclear energy usage to enhance energy security amid global supply concerns.
United Kingdom
The UK markets responded positively to economic indicators, highlighting recovery signs:
- Economic Growth: On December 13, the GDP report revealed 0.3% growth for November, while industrial production climbed 0.5%. These figures boosted investor confidence in the economic recovery.
- FTSE 100 Performance: The index gained ground on the back of positive data, reflecting renewed optimism.
- National Insurance Changes: The government confirmed changes to National Insurance Contributions (NICs), effective April 2025, impacting employers across industries.
Europe
Europe’s markets and policymakers focused on structural reforms and financial initiatives:
- Banking Union Developments: Discussions continued on advancing the banking union and capital markets union, aimed at enhancing financial stability across the EU.
- Listing Act Implementation: The Listing Act, effective December 4, aims to streamline capital market access for SMEs, improving financing opportunities for European businesses.
- Regulatory Initiatives: The European Securities and Markets Authority (ESMA) announced consultations on updates, including T+1 trade settlements and EMIR regulation changes to enhance market efficiency.
