Last week, the international market was constantly changing, and the 30th APEC Leaders' Informal Meeting was held in San Francisco.
The US government has once again avoided a shutdown crisis. In terms of the market, the US stock market recorded three consecutive weekly gains, with the Dow up 1.94%, the Nasdaq up 2.37%, the S&P 500 up 2.24%, and the Nasdaq up 2.37%. The three major European stock indices rose across the board, with the FTSE 100 index in the UK rising 1.95%, the DAX 30 index in Germany rising 4.49%, and the CAC 40 index in France rising 2.68%.
There are many highlights this week, with the Federal Reserve and the European Central Bank releasing policy meeting minutes to focus on relevant clues about future policy paths. Major economies in Europe and America will release their November PMI, which is expected to continue to face severe challenges. The UK will release a statement on its autumn budget. The US stock earnings season is approaching its end, with Nvidia, the leader in the artificial intelligence industry, becoming the focus, and the performance of several Chinese concept stocks also deserves attention. The United States will welcome the Thanksgiving holiday, and market trading may be slightly light.
The US federal government has once again avoided a shutdown crisis
This week, both houses of Congress passed the segmented "expediency bill" proposed by the new Speaker of the House of Representatives, Johnson. The bill will extend the funding period for priority projects such as military construction, veterans' affairs, transportation, housing, and energy to January 19th, and extend the funding period for other government departments to February 2nd. US President Biden subsequently signed the bill, which also means that the debate on federal spending, which is full of political divisions, will be pushed towards an election year.
The Federal Reserve held interest rates unchanged for the second time in a row last month, and Fed Chairman Powell's relatively mild stance at the press conference led to a peak and a decline in US bond yields. In the meeting minutes released this week, the outside world will look at how willing the entire committee is to further raise interest rates at a time of significant economic slowdown in the United States. From the recent opinions of several Federal Reserve officials, the direction of the data is welcome, but we still hope to see more evidence.
In terms of data, this week we need to pay attention to indicators such as housing, durable goods orders, and the number of unemployment benefit applicants. As mortgage interest rates rise to 8%, the sentiment of homebuilders has sharply declined, leading to weaker mortgage application numbers. Institutions expect existing home sales to fall to a new cyclical low. At the same time, considering the fluctuations in Boeing orders and the possibility of a decline in durable goods orders, the strength of core indicators (excluding defense and aircraft orders) becomes more important. The initial unemployment benefit data will continue to be an important basis for external predictions of the Federal Reserve's interest rate cut milestone.
As the financial reporting season draws to a close, the biggest focus of this week is undoubtedly the performance of artificial intelligence giant Nvidia. This year, the "Technology Seven" have become the main driving force for the rise of US stocks. After the release of new chips last week, the external attention to the industry's prospects has further increased. Wall Street predicts that Nvidia's revenue in the third quarter will reach $16.1 billion, exceeding the company's expectations. In the fourth quarter, revenue is expected to further reach $17.7 billion, a year-on-year increase of 193%.
In addition to NVIDIA, companies worth paying attention to include Zoom, HP, Deere, Johnson Controls, and other companies. Chinese concept stocks such as Baidu, iQiyi, Ctrip, and NIO Motors will also release performance one after another.
Crude oil and gold
Last week, the intensification of international oil price fluctuations, concerns about energy demand, and the sharp increase in US crude oil inventories over the past two weeks once made the market approach a bear market quagmire. Subsequently, news about OPEC+considering reducing production reversed the situation. WTI crude oil fell 1.66% to $75.89 per barrel for the week, while Brent crude oil fell 1.01% to $80.61 per barrel for the week.
Colin Cieszynski, Chief Market Strategist at SIA Wealth Management, believes that although the recent increase in US (crude oil) inventories has not helped solve the problem, the decline in crude oil prices seems to be driven by concerns about declining demand. As industrial output in the United States declines, this indicates that the economy may be weak, which in turn will affect energy consumption.
Stephen Innes, a partner at SPI Asset Management, said: "With the recent drop in Brent crude oil prices of $80, the so-called Saudi 'bearish' zone has begun to take effect, so there is considerable speculation that OPEC will intervene in some way." Saudi Arabia announced earlier this month that the voluntary production reduction of 1 million barrels per day starting in July will be postponed until the end of the year.
The international gold price rebounded sharply. People increasingly expect the Federal Reserve to end its monetary policy tightening, and the yield of the US dollar and US treasury bond bonds weakened. The COMEX gold futures contract for delivery on the New York Mercantile Exchange rose 2.54% on the week to $1981.60 per ounce.
Gainesville Coins Chief Market Analyst Everett Millman said, "Gold has great potential to continue rising, but before the next round of gains, prices need to consolidate and test the $2000 level. This week's data confirms the fact that the Federal Reserve may have ended interest rate hikes, and the direction of gold will depend on upcoming economic performance and market reactions
UK Announces Autumn Budget Statement
Investors are evaluating the prospects for further tightening by the European Central Bank. European Central Bank President Lagarde warned last week that the European financial industry is facing risks due to economic weakness and high interest rates. The increase in financing costs and a significant decrease in loan volume have had a negative impact on the profitability of banks. Low growth and high debt service costs will continue to burden European households and businesses.
This week, Europe will release November Purchasing Managers' Index (PMI) data. The institution expects that the data will remain below the boom and bust line after a slight and moderate recovery. Amidst the continued downturn in the manufacturing industry, the slowdown in demand is beginning to spread to the service industry, which will also bring more uncertainty to the future economic prospects of Europe.
According to data released by the Office for National Statistics, the unemployment rate in the UK was 4.2% in October, unchanged from the previous three months. In the three months ended October, the total job vacancies dropped to their lowest point since mid-2021, at 957000, indicating that the labor market is cooling down. At the same time, the average salary growth, excluding bonuses, decreased to 7.7%, a slight decrease from the previous historical peak of 7.9%.
The slowdown in wage growth is good news for the Bank of England as it helps alleviate the pressure of rapid price increases. Ashley Webb, a UK economist at Kaitou Macro, said this indicates that tight monetary policy is producing the expected effects. Like other Western central banks, as inflation cooled, the Bank of England suspended the previous round of interest rate hikes, keeping the key interest rate at 5.25%, but stated that it is not expected to start cutting rates soon.
This week, the UK Chancellor of the Exchequer, Andrew Hunter, will submit a statement on the autumn budget to the UK Parliament. So far this fiscal year, government borrowing has been £ 20 billion lower than forecast. The agency predicts that the new forecast from the Office of Budget Responsibility (OBR) may indicate that there is more room for maneuver while achieving its main fiscal goal of reducing debt to GDP within five years.
Highlights of this week