Week from 25 November to 1 December 2019
Stock markets rebounded during the last week of November in spite of mixed macro data that came out for the month of October. On the one hand, profits by Chinese industrial firms declined by 9.9% year-on-year, consumer confidence retreated in the U.S. and new home sales dropped 0.7%, South Korea’s overall industrial output fell 0.4%, German retail sales decreased by 1.9% while they plummeted 14.4% month-on-month in Japan! On the other hand, U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially estimated. Furthermore, the number of Americans filing claims for jobless benefits fell. Last but not least, Fed Chairman Jerome Powell struck an upbeat tone during a Monday night speech in which he described the outlook for the American expansion as a glass which is “much more than half full.”
The S&P500 eventually gained +0.99%, the Dow Jones Industrial Average rose +0.63%, and the Nasdaq Composite added +1.71%. It’s worth noting that small cap stocks (Russell2000: +2.24%) beat large cap stocks.
Japanese market followed suit (Nikkei225: +0.78%). European markets were also up, though to a lesser extent (EuroStoxx50: +0.44%, FTSE: +0.27%). By contrast, Hong Kong finished down -0.84% despite Alibaba’s strong debut in the world’s largest share sale this year. Same trend for emerging markets (down -0.81%).
In fact, stocks wobbled after Thanksgiving as Donald Trump signed into law congressional legislation supporting Hong Kong’s pro-democracy movement. Beijing reacted with fury to this decision, invoking a serious violation of international law, and simultaneously pressed for more extensive rollbacks of tariffs in the phase-one trade deal.
Most of the S&P sectors were up, IT (+1.73%) and consumer discretionary (+1.76%) leading the pack while energy lagged behind (-1.55%) in the wake of declining oil prices. U.S. WTI crude was down 4.5% at $55.17 per barrel.
Treasury yields remained unchanged and corporate bonds move higher: investment grade bonds up +0.13% in Europe and +0.31% in the U.S. ; high yield bonds up +0.63% in Europe and +0.46% in the U.S. Conversely, emerging debt in local currencies posted its fourth negative week (-0.48%) in a row.
Find the full report here: https://www.trackinsight.com/weekly-flow-report/2019-11-29/global