Global Stock Market Update: Mixed Performance Amid Inflation Focus Week
Global Stock Market Weekly Analysis (26 Feb – 1 March 2024)
The global stock market indexes ended mixed for the week ending on March 1. The US, Europe, and major Asian markets closed the week on a mixed note as inflation and manufacturing activity remained focused during the week.
The US Stock Markets – Weekly Updates
The stock market indexes closed mixed during the week on Wall Street. The Dow Jones Industrial Average (DJIA) ended slightly lower while the S&P 500 and Nasdaq indexes advanced over the week. The February month also ended on a strong footing for the US markets, with the S&P 500 marking its optimistic start two months of the year since 2019, according to The Wall Street Journal.
The much-awaited event of the week was the personal consumption expenditure (PCE) price index. The data released on Thursday by the Commerce Department showed that the Fed’s preferred inflation gauge- the Core PCE price index ( excluding food and energy) rose 2.8% for the 12 months ended in January. The data was in line with the expectations and somewhat calmed the concerns of the Labor Department’s earlier release of CPI inflation data.
The other weekly economic data mostly surprised the market on the downside. The ISM gauge of manufacturing activity for February came below the expectation. The pending home sales unexpectedly fell in January due to volatility in mortgage rates and the weekly jobless claims jumped. The US durable goods orders slumped in January, while jumped in personal income surprised the markets
The in-line PCE inflation report and downside ISM report pushed the Treasury yields to close lower during the week. The 10-year Treasury yield which was closed at 4.251% in the previous week has now eased to 4.185% on Friday. According to the CME FedWatch tool, the probability of cutting interest rates in May has increased from 23% recorded a week before to 28%.
European Stock Market Indexes- Weekly Updates
European stock market indexes closed mixed during the week ending March 1. The pan-European Stoxx 600 index closed edged higher and remained near record highs. The sentiments were cautious ahead of the inflation data from Europe and from the US markets. The major European stock market indexes Germany’s DAX and Italy’s FTSE MIB closed higher while France’s CAC and the UK’s FTSE were closed in the red.
European markets mainly focused on inflation and other economic data during the week. On Friday, the flash estimated data showed that the headline and core inflation cooled down in February but less than anticipated. The annual CPI inflation in the eurozone slowed marginally to 2.6%, while core inflation decelerated to 3.1%, surpassing the consensus estimate of 2.9%. The economic sentiments indicator declined unexpectedly to 95.4 in February, as the confidence in the services sector deteriorated due to lower demand.
In Germany, annual consumer prices continued the downtrend through February, reaching 2.7%. However, there was an increase in core inflation and prices of services. Private consumption continued to show weakness, a sequential decline in retail sales of 0.4% in January was seen, after falling 0.5% in December. The seasonally adjusted unemployment rate remained steady at 5.9% in February, marking its highest level in over two years.
Asian Stock Markets Updates
The other Asian markets also closed mixed during the week that ended on March 1st. In Asia, the stock market indexes of China and Japan, closed higher while Hang Seng and Kospi ended in the red this week. Indian stock markets will host a special short trading session on Saturday, both Sensex and Nifty are heading for a third consecutive week of gains.
Japan Stock Market
Japanese stock market index Nikkei 225 closed another strong week. The index closed just shy away from its 40000-marks on Friday. In Japan, the sentiments were positive as monetary policy remained accommodating, even though Bank of Japan Governor Kazuo Ueda emphasized that it was premature to affirm that the central bank had achieved its 2% inflation target consistently.
The historic weakness in the Japanese yen has also supported the markets, by encouraging Japan’s exporters, due to the revenues they derive from overseas. Meanwhile, the latest manufacturing PMI data showed that the deterioration in manufacturing activity worsened in February, due to weakness in both domestic and foreign (mainly Chinese) demand. However, service activity remains the key driver of Japan’s economy.
China Stock Market
China’s stock market index Shanghai gained during the week ending March 1, on hopes that Beijing may boost monetary easing measures to stimulate growth. On the economic data front, the official manufacturing PMI data came a tick lower in February compared to January and remained below 50-mark.
However, China’s market sentiments remain positive despite the official PMI data, as the weakness in factories actively was due to a weeklong holiday of the Lunar New Year in February. The non-manufacturing PMI rose better than the expectation. On the other hand, a separate private report showed that manufacturing activity edged up in February, beating market expectations.
According to the China Real Estate Information Corp, the value of new home sales compiled by the country’s top 100 developers slumped 60% in February compared to the same period last year, marking a significant acceleration from January’s 34.2% decline.
In Hong Kong, the Hang Seng and South Korea’s Kospi indexes were closed in the red during the week.
If you like the “Global Stock Market Update: Mixed Performance Amid Inflation Focus Week” post, please share it with others.
You may also like to read, Tradingview India Review- You Must Read
Options Trading Books: Your Ultimate 2023 Guide to Winning Big
Happy Investing!!
Editor’s Desk
