Week ending 29th November 2024.

Global financial markets posted gains last week, despite a subdued trading schedule in the US due to the Thanksgiving holiday. US markets were closed on Thursday and operated with shortened hours on Friday.

In the US, inflation was in focus with the core Personal Consumption Expenditures (PCE) price index—a key measure favoured by the Federal Reserve that excludes volatile food and energy prices—rising 2.8% year-on-year in October and 0.3% month-on-month. The data highlights moderate underlying inflation, providing little reason for an immediate change in monetary policy. It aligns with recent comments from Fed officials, who suggest there is no urgency to cut interest rates as long as the labour market stays strong and the economy resilient.

In the eurozone, inflation data showed an acceleration in the headline rate for the second consecutive month, rising to 2.3% in November from 2.0% in October, driven primarily by the fading effects of last year’s energy price declines. Core inflation held steady at 2.7%, while service sector inflation ticked down slightly to 3.9%. The European Central Bank is widely expected to lower borrowing costs in December, though the magnitude of the cut remains uncertain.

Chinese equities advanced as optimism over government support measures outweighed concerns about potential US tariff hikes. The Hang Seng Index rose, supported by a RMB 900 billion liquidity injection from the People’s Bank of China via its medium-term lending facility, with the rate held steady at 2%. Manufacturing data reflected improving conditions, with the PMI rising to 50.3, its highest level since April, driven by stronger new orders and export demand. Business confidence climbed to a seven-month high, despite ongoing challenges. Investors are also closely watching for additional measures from Chinese authorities to stimulate the economy ahead of Trump’s inauguration next month.

The ‘my wealth invest’ app will be available to clients who hold investments with my wealth, which is a trading name of Wealth at Work Limited, part of the Wealth at Work group.

Oil prices declined roughly 3% last week, driven by reduced supply concerns linked to the Israel-Hezbollah conflict and expectations of increased production in 2025. OPEC+ postponed its policy meeting to December 5, where further output cuts are likely to be discussed. The group recently revised down its forecast for global oil demand growth for 2024 and 2025, citing economic headwinds in major importers like China and India.

Key data releases next week include US, UK, and eurozone manufacturing and services PMIs, US JOLTS job openings, unemployment figures, and Michigan consumer sentiment.

Kate Mimnagh, Portfolio Economist