Wall Street ends lower: tech under pressure
Wall Street's major indexes ended Monday's trading session lower. The market was weighed down by losses in the tech sector, where shares of artificial intelligence leader Nvidia came under pressure. Investors are eagerly awaiting a key inflation report that could set the direction of the market at the end of the week.
China vs. Nvidia: The investigation and its consequences
Nvidia shares (ticker NVDA.O) fell 2.5%. The reason was the antitrust audit of the company that began in China. The regulator suspects the chipmaker of violating local laws, which provoked a general decline in shares in the information technology sector (.SPLRCT), which lost 0.45%.
AMD's losses and pressure on chipmakers
Advanced Micro Devices (AMD.O) suffered even more, losing 5.7% of its value. The fall in shares occurred against the background of a reduction in their rating by analysts at BofA Global Research. This was reflected in the Philadelphia Semiconductor Index (.SOX), which ended the day with a minus of 0.87%.
Expert opinion: the market is surprised by China's actions
"The Chinese investigation against Nvidia came as a surprise to market participants. This event caused some caution among investors," said Sam Stovall, chief investment strategist at CFRA Research in New York.
Looking Ahead: Inflation Report Expectations
With key tech stocks falling, investors are turning their attention to the upcoming inflation report, which could have a decisive impact on the stock market's future.
Indices Fall
U.S. stock markets continued to fall on Monday, ending the day in the red. The major indices failed to hold their previous levels, reflecting investors' general anxiety ahead of important economic data and reactions to corporate events.
Dow, S&P 500 and Nasdaq Losses
The Dow Jones Industrial Average (.DJI) lost 240.59 points, or 0.54%, to 44,401.93. The broad S&P 500 (.SPX) fell 37.42 points, or 0.61%, to 6,052.85. The tech-heavy Nasdaq Composite (.IXIC) closed down 123.08 points, or 0.62%, at 19,736.69.
The declines affected nine of the 11 S&P 500 sectors, with financials weighing most heavily.
Comcast: Poor Guidance and Market Reaction
Communications giant Comcast (CMCSA.O) was one of the biggest losers of the day. Shares of the company fell 9.5% after forecasting it would lose more than 100,000 broadband subscribers in the fourth quarter. That weighed heavily on the Communications Services sector (.SPLRCL), which ended the day down 1.3%.
Hershey and Mondelez: Chocolate Intrigue
Amid a general decline in markets, Hershey (HSY.N) shares were one of the few bright spots of the day, soaring 10.9%. The sharp rise was fueled by reports that Mondelez (MDLZ.O), the parent company of Cadbury, is considering buying the chocolate maker. However, for Mondelez itself, the news resulted in a loss of 2.3% in its share price.
Expectations ahead of key economic data
Investors are tensely awaiting the release of inflation data. The consumer price index (CPI), which will be released on Wednesday, and the producer price index (PPI), scheduled for Thursday, will be critical ahead of the Federal Reserve's meeting on December 17-18.
Rate forecasts: bracing for a decrease
After the release of data showing the unemployment rate rose to 4.2% in November, investors are pricing in an 85% chance of a 25 basis point rate cut at the upcoming Fed meeting. Rising unemployment signals a weakening labor market, potentially prompting the Fed to take a more accommodative approach.
But Fed officials, including Chairman Jerome Powell, remain cautious. They continue to emphasize the need for a measured approach to rate cuts, noting the resilience of economic growth.
December starts with optimism as stock markets gain momentum
Wall Street's major indexes have had mixed starts to December. The S&P 500 (.SPX) and Nasdaq Composite (.IXIC) finished the first week of the month higher, while the Dow Jones Industrial Average (.DJI) was slightly lower. Amid these changes, the market continues to react to corporate news and expectations of policy changes.
Workday in Focus
Workday (WDAY.O) shares rose an impressive 5.1% after it was announced that it would be joining the S&P 500. The news caught the attention of investors, raising interest in the company and fueling optimism in the tech sector.
M&A: Interpublic and Omnicom
Interpublic Group (IPG.N) gained 3.6% after reports that marketing giant Omnicom (OMC.N) was in advanced talks to buy the company. However, the news turned out to be a downside for Omnicom, with shares falling 10.3%. Interest in the deal remains high as investors weigh the potential for a combination.
November Election Impact
The U.S. stock market saw a surge in November, driven by Donald Trump's victory in the presidential election and his party's gains in Congress. This raised expectations for a more business-oriented policy, which was one of the catalysts for growth.
Equity Market: Indicators and Dynamics
On the New York Stock Exchange, the number of stocks that ended the day lower outnumbered those that advanced by a ratio of 1.24 to 1. At the same time, the NYSE recorded 216 new highs and 35 new lows.
The S&P 500 index recorded 21 new 52-week highs and only 2 lows. The Nasdaq Composite showed more active dynamics with 122 new highs and 60 lows.
Trading Volume: Above Average
Activity in the markets remains high. During the session, 15.11 billion shares were traded, which is significantly higher than the average volume over the past 20 trading days, which is 14.46 billion shares. The increase in trading volume indicates high interest among market participants in the current dynamics and expectations.
Expectations: Market on Hold
Investors continue to analyze the impact of recent political events while keeping an eye on corporate news and macroeconomic indicators. The coming weeks will show whether December's positive momentum will continue.
Global Markets in the Red: Inflation, Stimulus, and Geopolitics in the Foreground
World stock indices closed lower on Monday as investors focused on upcoming U.S. inflation data. Key stocks came under pressure. At the same time, oil and gold prices rose more than 1%, fueled by news of China's stimulus plans and the political crisis in Syria.
U.S.: Inflation under close scrutiny
This week's release of U.S. inflation data could be a deciding factor in whether the Federal Reserve (Fed) will cut interest rates at its meeting next week. The rate cut is expected to support economic growth amid global uncertainty.
China Changes Course: Economic Stimulus
Markets reacted with interest to the news from China, where the authorities changed the wording of their monetary policy for the first time since 2010. Beijing said it plans to introduce additional stimulus to accelerate economic growth in 2024. This decision caused a positive response from investors despite the overall decline in global markets.
Syria: Geopolitical Factor
The unexpected collapse of the 24-year rule of Syrian President Bashar al-Assad has become a new factor of tension in the Middle East. The political vacuum has increased instability in the region, leading to an increase in the prices of oil and gold. These assets, traditionally perceived as safe havens, have become the focus of investors seeking refuge from geopolitical risks.
US Employment: Strong but Mixed Data
The US employment data released on Friday showed enough resilience in the economy to allay concerns about a possible recession. However, it also left open the question of the need for monetary easing. Modest job growth supported expectations for a rate cut but ruled out the possibility of an aggressive move.
Indicators: Global indices decline
The MSCI Worldwide Equity Index (.MIWD00000PUS) fell 2.05 points, or 0.23%, to 871.68, reflecting a general decline in sentiment amid uncertainty and expectations for the upcoming data.
Markets await the outcome
Global investors continue to watch key events including U.S. inflation data, China's stimulus plans and escalating tensions in the Middle East. These factors will shape market sentiment in the coming days, creating both risks and opportunities.
December euphoria: markets are upbeat, but there are caveats
Markets continue to show strong gains, with December living up to its reputation as a strong month for investors. However, experts warn that excessive self-confidence can play a cruel joke on market participants.
Capital Inflows and Investor Confidence
"December has traditionally been positive three times out of four times, and we have seen record capital inflows into equities, strong asset manager activity and optimism among retail investors," Morgan Stanley chief investment officer Lisa Shalett said in a research note.
However, Shalett cautioned that signs of complacency are starting to emerge. "Despite current technical support, we advise long-term investors to remain moderate in their expectations," she added.
Europe in the black: Gains on China stimulus
European stocks ended Monday at six-week highs, led by mining and luxury names, buoyed by China's pledge to resume economic stimulus. The pan-European STOXX 600 index (.STOXX) added 0.1%, marking its eighth straight session of gains.
US: Jobs Report and Inflation Expectations
The US jobs data for November released last week beat expectations, adding 227,000 jobs instead of the expected 200,000. Moreover, the October figures, which had been distorted by the effects of the hurricane, were revised up.
The strong data has boosted confidence in the likelihood of a Fed rate cut. The probability of a 0.25% rate cut at the December 17-18 meeting has risen to 85% (from 68% before the jobs report). In addition, markets are starting to price in three more rate cuts next year.
The Next Frontier: Inflation Data
The key event of the week will be the release of the US inflation report on Wednesday. It is this data that could determine the future direction of the Fed's monetary policy. Investors will be closely studying the numbers to get a sense of how sustainable the current growth can be.
Growth with caveats
Despite an optimistic start to December, experts are urging market participants to remain cautious. Markets may have been too quick to believe in a continuation of the positive dynamics, and upcoming economic data could change the situation.
Financial markets: dollar strengthens, bonds rise, Asia sends mixed signals
Financial markets continue to react to global economic events. The dollar is showing growth, US Treasury yields are increasing, and Asian markets are showing mixed dynamics amid changes in China's monetary policy and political instability in South Korea.
Dollar strengthens, euro loses ground
The US dollar index, reflecting its value against a basket of major currencies, including the yen and the euro, rose by 0.2%, reaching 106.16. At the same time, the euro fell by 0.15%, fixing the rate of $1.0552. The growth of the American currency underscores the heightened expectations of investors amid the upcoming decisions of the Federal Reserve System (Fed).
Treasury yields on the rise
The bond market is also showing activity. The yield on the 10-year U.S. Treasury note rose 5 basis points to 4.203%, up from 4.153% at the end of last week. Traders are weighing the impact of high price pressure on the likelihood of a Fed rate cut, making the bond market a key indicator of sentiment.
European Central Bank: Rate cut in the works
The European Central Bank (ECB) is preparing for a meeting on Thursday, where it is expected to cut its rate by a quarter of a percentage point. The decision could affect the future performance of the euro and European assets, increasing investor attention to monetary policy in the region.
China changes course
Chinese stocks and bonds rose in Asian markets, driven by a revision of the monetary policy language announced by China's Politburo. For the first time in 14 years, the usual term "cautious" was replaced by "appropriately loose" monetary policy for 2024. The change signals plans for active economic stimulus, which has encouraged investors.
The MSCI Asia-Pacific share index (.MIAPJ0000PUS) ended the day up 0.88%, reflecting positive sentiment in the region.
South Korea: Political instability weighs on the market
In contrast, the South Korean market suffered a decline. The KOSPI index (.KS11) fell 2.8%, and the national currency, the won, weakened. The market is under pressure from uncertainty surrounding the future of President Yoon Seok-yol. Despite government promises to stabilize financial markets, investors remain wary.
Focus on monetary policy
The current week will be a key one for financial markets. Rate decisions in the US and Europe, as well as changes in China's monetary policy, could set the tone for future moves. Investors will be watching macroeconomic data and geopolitical developments to strategize in a highly uncertain environment.
Central Banks in Focus: A Crucial Week of Meetings
The week ahead promises to be a busy one for global markets as central banks around the world prepare to announce their monetary policy decisions. From Europe to South America, market participants are watching closely to see how policymakers will manage inflation, slowing growth and geopolitical instability.
Rate Decisions: From Switzerland to Brazil
The Swiss National Bank may cut rates by half a percentage point as inflation pressures ease, with similar moves expected from Canada's central bank when it meets on Wednesday.
On the other hand, the Reserve Bank of Australia is likely to leave rates unchanged when it meets on Tuesday. Brazil's central bank, meanwhile, is considering another rate hike to combat inflation, which remains a key threat to South America's largest economy.
Economic Challenges: Europe Without a Leader
Barclays economist Christian Keller notes that in the context of global geopolitical uncertainty and mixed economic data, central banks are becoming the main instrument for supporting economic activity. He also draws attention to the lack of strong political leadership in Europe, which complicates the solution of economic problems.
France, for example, remains without a prime minister after the resignation of Michel Barnier's government amid the scandal over the austerity budget. President Emmanuel Macron has not yet decided on a new candidate, adding to the uncertainty.
Geopolitics drives up oil and gold prices
Events in Syria over the past weekend have increased tensions in the Middle East, which has immediately affected commodity prices.
Gold: Spot gold rose 1.1% to $2,662.98 an ounce, while U.S. gold futures rose 1% to $2,685.50.
Oil: Oil prices also rose. Brent futures rose 1.4% to $72.14 a barrel, while US crude gained 1.7% to $68.37 a barrel.
Expert commentary
Jorge Leon, head of geopolitical analysis at Rystad Energy, said: "Events in Syria could have a lasting impact on the oil market, increasing the geopolitical risk premium. With instability in the Middle East on the rise, we can expect prices to rise further in the coming weeks and months."
A week of decisions and risks
Financial markets are in a state of anticipation. The outcome of central bank meetings, developments in the Middle East and political instability in Europe will set the tone for key assets. Investors will look to regulatory signals and geopolitical developments to understand what challenges await the economy in the near future.
