Stock Market Today
Global stock markets saw gains on Monday, driven by a U.S. inflation report that sparked optimism for potential policy adjustments in the coming year. Investors were also relieved after the U.S. managed to avoid a government shutdown.
Federal Reserve officials, and U.S. Economic data
Following a flurry of central bank decisions, this week will see only the release of minutes from some of those meetings. There are no speeches from Federal Reserve officials, and U.S. economic data will take a backseat. The primary market trends continue to be similar, with the dollar supported by a robust economy and rising bond yields, which are weighing on commodities and gold.
European Stock Market have faced pressure in recent weeks, as investors have increasingly focused on U.S. Stock Market and the dollar.
Donald Trump’s
The STOXX 600, which dropped 0.15%, is on track for a 4% decline this quarter, marking its worst quarterly performance in two and a half years, in contrast to a 3% gain in the S&P 500.
The euro has fallen to two-year lows recently and is set for its weakest quarterly performance against the dollar since Q2 2022, down 6.5%.
Investor sentiment towards the euro zone economy has soured, especially following U.S. President-elect Donald Trump’s threat to introduce significant tariffs on exports from the region to the U.S.
Germany & France
“We’ve slightly revised our euro/dollar forecast lower for next year, with risks leaning towards a stronger dollar. Many of Trump’s policies—such as tax cuts, deregulation, trade tensions, mass deportations, and his contentious stance on geopolitical issues—could all contribute to a stronger dollar,” said Jan von Gerich, a strategist at Nordea.
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Donald Trump’s Election
Political instability in two of the euro zone’s major growth drivers, Germany and France, has undermined investor confidence in Europe. Meanwhile, the U.S. economy continues to show resilience, with steady job growth, declining inflation, and strong business activity, all contributing to the S&P 500 reaching record highs this year.
Trump’s Policies
“While the U.S. economy remains robust, there are growing divergences in trends, largely due to the impact of Donald Trump’s election,” strategists at asset manager Edmond de Rothschild noted in a recent report.
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In Asia, Japan’s Nikkei rose by 1.2%, and the Topix automaker index gained 1.3%, buoyed by signs of progress in the potential merger between Honda and Nissan.
The MSCI All-World index, which has climbed 16% this year, was up 0.2% for the day.
As Wall Street’s trading session approached, S&P 500 futures were up by 0.3%, and Nasdaq futures increased by 0.5%. Despite a nearly 2% drop in the S&P 500 last week and a 1.8% decline in the Nasdaq, the latter remains up 30% year-to-date.
U.S. futures suggest that two quarter-point interest rate cuts are expected next year, potentially bringing the benchmark rate to a range of 3.75-4.0%. Just two weeks ago, expectations were closer to a range of 3.50-3.75%.
As a result, 10-year Treasury yields have surged, rising nearly 42 basis points in the past two weeks to approximately 4.54%, marking the largest increase since April 2022.
In the currency Stock Market , the dollar index remained near two-year highs at 107.96, having gained around 2% this month. The euro fell 0.2% to $1.0409, dipping below $1.04 last week to hit two-year lows.
Against the yen, the dollar rose slightly by 0.1% to 156.55.
Oil prices inched higher alongside other risk assets, although the strong dollar and concerns over Chinese demand, following weak retail sales figures last week, continue to weigh on the Stock Market .
