Global stock markets have had a mixed week, with ongoing optimism about the outlook for the US economy tempered by rising geopolitical tensions
Ukraine’s use of western weapons in strikes on Russian territory provoked a belligerent response from Vladimir Putin, driving up the price of oil and other commodities. However, investors in the US continued to focus on the expected upside from President Trump’s more relaxed approach to corporate regulation and taxation.
United States
On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1% up for the week so far, with the S&P 500 gaining 1.3%. Despite continued signs of resilience in the US jobs market, the Federal Reserve remains on course to cut interest rates again next month. Small-cap stocks performed particularly well this week on hopes of a more favourable business environment under the incoming Republican administration, and there were positive earnings statements in the technology sector. However, shares in one of America’s largest software companies fell later in the week on the news that the Department of Justice had ordered the firm to carve out parts of its business to address antitrust concerns.
UK
In the UK, the FTSE 100 closed on Thursday 1.1% up for the week so far after rises in oil prices and strength in sterling supported gains among blue-chip stocks. A surprise uptick in inflation, with the consumer prices index increasing from 1.7% in September to 2.3% in October, appears to have ended hopes of another Bank of England base rate cut in 2025. The pound rose as a result. Elsewhere, economic news was generally downbeat, with data showing a fall in consumer confidence and a decline in asking prices in the residential property market. Retailers warned they would be forced to cut large numbers of jobs as a result of the rise in employers’ payroll taxes due to come into effect in April.
Europe
In Frankfurt, the DAX index ended Thursday’s session down 0.3% for the week, while France’s CAC 40 fell 0.8%. European Central Bank officials highlighted the potentially negative impact of tariffs on trade with the US, but noted that trade barriers were unlikely to have a material impact on inflation in the eurozone. The escalation of conflict between Russia and Ukraine weighed on European markets, and gas prices across the continent rose on a combination of possible supply disruption and the onset of colder weather. Central bankers in Germany warned of a surge in company insolvencies and growing risks in the commercial real estate sector.
Asia
In Asia, the Hang Seng index in Hong Kong gained 0.9% following reports that China’s President Xi Jinping may seek a more constructive approach to relations with the incoming Trump administration. Investors in China were also hopeful that central bank officials could soon make further cuts to interest rates. Japan’s Nikkei 225 index of leading shares, meanwhile, fell 1.6%, partly due to concerns about the sustainability of growth in the global semiconductor industry. Share prices in Tokyo came under pressure at the start of the week due to disappointing third-quarter economic data.
November 15 | November 21 | Change (%) | |
|---|---|---|---|
FTSE 100 | 8063.6 | 8149.3 | 1.1 |
FTSE 250 | 20476.6 | 20316.5 | -0.8 |
S&P 500 | 5870.6 | 5948.7 | 1.3 |
Dow Jones | 43445.0 | 43870.4 | 1.0 |
DAX | 19210.8 | 19146.2 | -0.3 |
CAC 40 | 7269.6 | 7213.3 | -0.8 |
ACWI | 842.6 | 851.4 | 1.0 |
Hong Kong Hang Seng | 19426.3 | 19601.1 | 0.9 |
Nikkei 225 | 38642.9 | 38026.2 | -1.6 |
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 21 November 2024.
