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Market UpdatesOctober 21, 2024

Markets Last Week - 18/10/2024

Hoxton BlogMarkets Last Week - 18/10/2024

  • Market Updates

A summary of the latest developments in the global economic markets.

U.S.

Stock Market Performance

The S&P 500 Index advanced, led by utilities and real estate, while energy stocks declined due to a reduction in oil price fears regarding Israeli-Iran tensions. Small-cap and mid-cap indices outperformed the broader market. The Nasdaq Composite surged on Friday, driven by strong earnings from companies like Taiwan Semiconductor Manufacturing and Netflix.

Treasury Yields and Bank Loans

U.S. Treasury yields fluctuated, rising on Thursday but falling on Friday following weaker housing starts and building permits. The bank loan market saw heavy issuance.

Economic Indicators

Retail sales rose 0.4% in September, reflecting strength in consumer spending, while industrial production declined by 0.3%, impacted by natural disasters and a Boeing strike. Jobless claims fell by 19,000 to 241,000 after an earlier spike caused by Hurricane Helene.

Europe

Stock Market Performance

The STOXX Europe 600 Index rose 0.58%, buoyed by the European Central Bank’s (ECB) interest rate cut. Major indexes in Italy, Germany, France, and the UK also posted gains.

ECB Cuts Rates

The ECB lowered its deposit rate to 3.25%, marking its second consecutive cut as part of ongoing efforts to support the economy amid a disinflationary trend. Markets expect further cuts in December.

Eurozone and UK Inflation

Eurozone inflation was revised down to 1.7%, below the ECB’s target, while UK inflation slowed to 1.7%, with wage growth decelerating. This may prompt the Bank of England to cut rates further.

Japan

Stock Market Performance

Japanese stocks fell, with the Nikkei 225 down 1.58% and the TOPIX Index losing 0.64%. Easing inflation raised speculation about slower interest rate hikes by the Bank of Japan (BoJ).

BoJ Policy and Currency Movements

BoJ officials emphasized gradual rate hikes due to uncertainties in global and domestic economic conditions. The yen weakened to the higher end of the JPY 149 range against the U.S. dollar, raising concerns of potential intervention.

Inflation and Exports

Japan’s core CPI eased to 2.4% in September due to energy subsidies, while exports declined by 1.7%, reflecting weak demand from China.

China

Stock Market Performance

Chinese equities rose, supported by central bank measures to address deflation. The Shanghai Composite gained 1.36%, while the CSI 300 rose 0.98%. In contrast, the Hang Seng Index in Hong Kong fell by 2.11%.

Economic Growth

China’s economy grew 4.6% year-over-year in the third quarter, exceeding expectations but remaining below the government’s 5% target. Industrial production and retail sales both showed signs of improvement.

Inflation Trends

Inflation in China cooled to 0.4% in September, while producer prices fell 2.8%, indicating deepening deflationary pressures.

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October 21, 2024

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