Global stock markets made steady progress this week despite the looming threat of a major dispute between the United States and some of its biggest trading partners.
President-elect Donald Trump said on Tuesday that his administration planned to impose swingeing 25% tariffs on Canada and Mexico, as well as a 10% rate on imports from China, when he takes office in January. Initially, the news caused sharp share price falls around the world. However, markets recovered as investors took the view that the tariff announcement could be the opening salvo in negotiations related to issues such as border security and, in the case of China, other forms of protectionism.
Elsewhere, oil prices fell back on the news of a ceasefire between Israel and Hezbollah in Lebanon, although signs of intensifying conflict between Russia and Ukraine caused further market jitters in Europe.
United States
On Wall Street, the Dow Jones Industrial Average ended trading ahead of Thursday’s Thanksgiving Day break 1% up for the week so far, with the S&P 500 gaining 0.5%. Stocks began the week on the front foot following the news that Trump had nominated hedge fund manager Scott Bessent as Treasury Secretary. Investors view Bessent as a potentially moderating influence who may be able to temper the president’s more extreme economic plans. The US economy was confirmed to have grown at an annualised rate of 2.8% in the third quarter, while unemployment claims remain low and household disposable income continues to rise.
UK
In the UK, the FTSE 100 closed on Thursday 0.2% up for the week so far, with gains muted by falls in the value of crude oil. On Monday, business leaders warned of the damaging impact of higher tax rates on employers, which are due to come into effect in April. Meanwhile, confidence among retailers and consumers continued to fall. Wednesday and Thursday’s sessions were more upbeat, with news of further takeover activity helping to improve sentiment among investors.
Europe
In Frankfurt, the DAX index ended Thursday’s session up 0.5% for the week, while France’s CAC 40 fell 1%. This was a four-month low on growing concern around the ability of Michel Barnier’s government to pass a fiscally responsible budget. Yields on French government bonds rose on fears that a new round of national elections may be needed to break the current parliamentary deadlock. Inflation in Germany rose slightly to 2.2% in November, while sentiment among investors across the eurozone was reported to have increased.
Asia
In Asia, the Hang Seng index in Hong Kong gained 0.7% despite reports that the US was planning to impose a 10% tariff on imports from China. Investors hoped the news would force the authorities in Beijing to introduce measures to stimulate the Chinese economy. Japan’s Nikkei 225 index of leading shares, meanwhile, advanced 0.2%. Worries about international commerce weighed on market sentiment, although investors welcomed the news that America’s planned curbs on global semiconductor trade were not as strict as had been expected.
November 22 | November 28 | Change (%) | |
|---|---|---|---|
FTSE 100 | 8262.1 | 8281.2 | 0.2 |
FTSE 250 | 20581.7 | 20762.8 | 0.9 |
S&P 500 | 5969.3 | 5998.7 | 0.5 |
Dow Jones | 44296.5 | 44722.1 | 1.0 |
DAX | 19322.6 | 19425.7 | 0.5 |
CAC 40 | 7255.0 | 7179.3 | -1.0 |
ACWI | 854.1 | 858.4 | 0.5 |
Hong Kong Hang Seng | 19230.0 | 19367.0 | 0.7 |
Nikkei 225 | 38283.9 | 38349.1 | 0.2 |
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 28 November 2024.
