Market expectations of a U.S. Federal Reserve rate cut drove Wall Street higher, while disappointing economic data led to a decline in Chinese stocks.
πΊπΈ S&P 500 Index: +0.38% π
πΊπΈ Nasdaq Index: +1.24% π
πͺπΊ Stoxx 600 Index: -0.12% π
π―π΅ Nikkei 225 Index: -0.03% π
ππ° Hang Seng Index: -0.88% π
π¨π³ Shanghai Shenzhen 300 Index: -0.54% π
πΈπ¬ Straits Times Index: +0.28% π
The U.S. stock market rose on Monday, with the S&P 500 Index and Nasdaq Composite Index gaining 0.4% and 1.2%, respectively. Investors digested the latest economic data while awaiting the Federal Reserve's final policy statement of the year to gauge future interest rate movements.
The U.S. S&P Global December Flash PMI showed that service sector activity further climbed (Services PMI: 56.6 vs. 55.1 consensus and 54.9 previous), while manufacturing output significantly declined (Manufacturing PMI: 48.3 vs. 49.4 expected and 49.7 previous).
Due to weaker capacity demand, the EU's December HCOB Eurozone Manufacturing PMI remained unchanged at 45.2 (expected 45.3), while the Services PMI rose from November's 49.5 to 51.4.
Japan's December Jibun Bank Manufacturing PMI preliminary value came in at 49.5 (expected 49.2), improving slightly from the previous month's 49.0, while the Services PMI rose from 50.5 in November to 51.4, highlighting an increasing dependence on the service sector.
The Asia-Pacific markets retreated, with the Hang Seng Index and Shanghai Shenzhen 300 Index falling by 0.9% and 0.5%, respectively, as consumer growth and real estate investment slowed.
China's November industrial output grew 5.4% YoY (expected 5.3%), exceeding October's 5.3% growth, partly due to some companies placing early orders ahead of potential U.S. tariffs.
China's retail sales grew 3.0% YoY in November (expected 4.6%), slowing down from October's 4.8% growth, as sales of non-essential goods, like cosmetics, declined.
In November, China's unemployment rate remained stable at 5%, as expected, with 10.49 million urban jobs created in the first nine months of 2024.
π‘ Upcoming Events π‘:
On Tuesday, U.S. data will be released, including retail sales YoY and industrial production YoY.
On Wednesday, investors will focus on EU inflation YoY final figures, Japan's exports YoY.
The U.S. will announce the Federal Reserve's rate decision, final GDP QoQ growth, and unemployment claims on Thursday. The Bank of Japan will also announce its rate decision on Thursday.
By the end of the week, on Friday, we will see the release of the U.S. core PCE price index YoY, Japan's core inflation YoY, China's 1-year and 5-year loan prime rates.
π‘ Things to Know Today π‘:
1. Masayoshi Son, CEO of SoftBank, during his visit to President-elect Trump, announced a $100 billion investment in the U.S., committing to create 100,000 jobs in artificial intelligence and infrastructure over the next four years.
CEO of Softbank
2. TikTok and its parent company ByteDance urged the U.S. Supreme Court to block a law that would ban the app by January 19, unless ByteDance divests its ownership, claiming the measure violates the First Amendment.
Bytedance
3. Activist investors like Elliott Investment Management and Oasis Management, along with Japan-focused investors like Yoshiaki Murakami's fund, have poured a record $6.6 billion into the Japanese stock market in 2024, driving corporate reforms, stock buybacks, asset disposals, and strategic changes.
Elliott Investment Management
4. In November, 49 out of 70 major Chinese cities saw new home prices fall by 0.2% month-over-month. Real estate investment plunged 10.4% in the first 11 months of 2024, with smaller cities continuing to face high inventory levels.
5. Gamuda Bhd's Australian subsidiary secured a AU$625 million EPC contract for the Goulburn River Solar Power Plant project, which involves the construction of a 585MW solar power plant to provide renewable energy for New South Wales.
Gamuda Berhad
β Key Points:
The short-term momentum of the U.S. market may depend on comments from Federal Reserve Chairman Powell after the announcement and whether retail sales or the PCE price index surprises the market.
Comments
Here are the market highlights for December 17, 2024:
The U.S. stock market showed positive performance, with the S&P 500 Index gaining 0.38% and the Nasdaq Index rising by 1.24%. This was driven by market expectations of a U.S. Federal Reserve rate cut.
Chinese stocks, on the other hand, experienced a decline due to disappointing economic data.
The European Stoxx 600 Index decreased by 0.12%.
The Japanese Nikkei 225 Index and Hong Kong Hang Seng Index declined by 0.03% and 0.88%, respectively.
The Shanghai Shenzhen 300 Index also saw a decline of 0.54%.
The Singapore Straits Times Index showed a slight increase of 0.28%.
In the U.S., investors focused on the latest economic data and awaited the Federal Reserve's final policy statement of the year to gain insights into future interest rate movements. The S&P Global December Flash PMI showed that service sector activity continued to climb, while manufacturing output declined significantly.
Notable events and news:
The U.S. Federal Reserve's final policy statement of the year could impact short-term market momentum.
TikTok's parent company, ByteDance, is facing a potential ban in the U.S. unless it divests its ownership by January 19. This is due to concerns over national security.
Activist investors, including Elliott Investment Management and Japan-focused investors like Yoshiaki Murakami's fund, have invested a record $6.6 billion in the Japanese stock market in 2024, driving corporate reforms and strategic changes.
Real estate investment in China has plummeted, with new home prices falling in many cities and smaller cities facing high inventory levels.
Gamuda Bhd's Australian subsidiary secured a AU$625 million EPC contract for the Goulburn River Solar Power Plant project, contributing to renewable energy generation in New South Wales.
Please note that the market highlights provided here are for informational purposes only and do not constitute investment advice.
"Risk Disclaimer: The information provided here is for reference purposes only and does not constitute investment advice. Always do your own research and consider your investment decisions carefully. Trading and investing involve risks, and you could lose money."
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what do you think will happen after the rate decision is announced ?