To The Moon

Overview

Global markets experienced declines on November 12, 2024, driven by profit-taking in the US and growing geopolitical concerns in Europe and Asia. Investors showed caution across regions, with sentiment dampened by potential shifts in US-China relations, anticipated inflation data in the US, and limited prospects for stimulus in China.

US Markets: Profit-Taking and Inflation Worries

US markets saw a pullback as investors locked in gains following post-election rallies. The Dow Jones $DJIA(.DJI)$   fell by 382.15 points (-0.8%) to 43,910.98, the S&P 500 $S&P 500(.SPX)$  dropped by 17.36 points (-0.2%) to 5,983.99, and the Nasdaq$NASDAQ(.IXIC)$   inched down 0.1%. Traders were cautious, awaiting upcoming inflation data that could impact the Federal Reserve's monetary policy direction.

European Markets: Geopolitical Tensions and Weak Earnings

In Europe, markets declined amid concerns over potential US diplomatic shifts, with rumors of Donald Trump possibly appointing a China hawk to a key position. This added uncertainty to the economic outlook, particularly with ongoing US-China trade tensions. The German DAX fell 2.1%, the French CAC 40 dropped 2.6%, and the FTSE 100 lost 1.2% following some disappointing corporate earnings updates.

Asian Markets: Caution on Chinese Stimulus Prospects

Asian markets also slipped as investors grew uncertain about the potential for further Chinese stimulus. Tokyo's Nikkei 225 edged down 0.4%, the Hang Seng Index$HSI(HSI)$   dropped sharply by 2.8%, and the Shanghai Composite fell by 1.3%. With limited stimulus prospects, investor confidence in Asia remained subdued.

Outlook and Insights

The global market outlook remains mixed. In the US, inflation data due shortly could shape expectations around interest rates, with any signs of persistent inflation likely to weigh further on equities. European markets face added risks from geopolitical uncertainties and soft earnings, which could limit upside potential in the near term. Asian markets may continue to be affected by concerns over China's policy direction, with investors watching for signs of additional economic support.

Conclusion

Overall, market sentiment appears cautious across the board, with profit-taking and geopolitical concerns dampening risk appetite. Investors should remain vigilant as inflation data, geopolitical developments, and central bank policy signals will be key drivers in the coming weeks.