Market Highlights 💡 - 20 December 2024

The Federal Reserve's hawkish signals have weakened global market sentiment.

🇺🇸 S&P 500 Index: -0.09% 📉

🇺🇸 Nasdaq Index: -0.10% 📉

🇪🇺 Stoxx 600 Index: -1.51% 📉

🇯🇵 Nikkei 225 Index: -0.69% 📉

🇭🇰 Hang Seng Index: -0.56% 📉

🇨🇳 CSI 300 Index: +0.09% 📈

🇸🇬 Straits Times Index: -0.44% 📉

Wall Street closed flat, with the S&P 500 and Nasdaq Composite Index both down by -0.1%. The previous day, the Federal Reserve forecast a lower-than-expected rate cut and warned of rising inflation next year, severely impacting the U.S. stock market.

U.S. Q3 2024 GDP growth was 3.1%, above the previous forecast of 2.8%, driven by increased consumer spending and exports, indicating the economy is still growing strongly.

For the week ending December 14, U.S. initial jobless claims dropped significantly by 22K to 220K (expected 230K, previous 242K), showing the job market remains overall healthy.

The Bank of Japan (BOJ) maintained its short-term policy rate at 0.25%, as expected. However, the yen weakened after BOJ Governor Kazuo Ueda hinted that future interest rate hikes would be approached with caution.

Japan's core inflation accelerated to 2.7% year-on-year in November (expected 2.6%, previous 2.3%), driven by higher food and fuel costs, putting pressure on the BOJ to raise interest rates.

Asian stock markets were mixed. The Hong Kong Hang Seng Index fell 0.6%, while the CSI 300 Index rose slightly by 0.1%, impacted by the Federal Reserve's hawkish rate outlook.

💡 Upcoming events: 💡

By the end of this week, on Friday, we will see the release of the U.S. core PCE price index year-on-year, Japan's core inflation year-on-year, China's 1-year and 5-year loan prime rates.

💡 Things to know today: 💡

1. Nike's $Nike(NKE)$ new CEO, Elliott Hill, outlined plans to refocus on sports marketing, update product lines, and repair retail relationships to revitalize growth. However, Hill warned that the transformation will take time and face short-term financial headwinds.

Nike

2. Thousands of Amazon $Amazon.com(AMZN)$ workers are striking during the key holiday season, after union officials said the retailer failed to negotiate a contract.

Amazon strike

3. "Real interest rates are still very low. If the economy and prices align with our forecast, we will continue to raise policy rates. As for the timing of adjusting monetary support, we need to carefully review various data before making a decision." — BOJ Governor Ueda.

BoJ Governor Ueda

4. The Hong Kong Monetary Authority (HKMA) cut its benchmark rate by 25 basis points to 4.75%, following the Federal Reserve's move to lower financing costs and stabilize the real estate market.

Hong Kong Monetary Authority

5. Apple $Apple(AAPL)$  is in preliminary talks with Tencent $TENCENT(00700)$ and ByteDance to integrate its AI models into iPhones sold in China, seeking local solutions to comply with China's generative AI regulations.

Apple x Tencent x Bytedance

✅ Key points:

As central bank actions settle, Asian investors ended the final full trading week of the year, hoping for some relief from the global market selloff triggered by the Fed's hawkish rate cut.

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