Stocks continued to build on recent gains as investors have grown more optimistic about peaking central bank rates while Treasury yields have declined. For the week, the S&P 500 advanced 1%, the Dow Jones was up 1.3%, and the Nasdaq Composite gained 0.9%. As we enter the final days of November, all three indices are on track for their best monthly performance in over a year. While earnings season has mostly wound down, Nvidia’s third quarter report was closely watched; the chipmaker beat earnings estimates but it flagged that it expects a drop in fourth quarter sales in China given new US export rules, pushing its shares lower. The yield on the 10-year US Treasury had hit a two-month low ahead of the holiday, but it rallied back on Friday to settle at 4.48%.
European markets also gained on peak interest rate hopes, even as European Central Bank (ECB) policymakers tried to play down rate cuts for 2024. Minutes from the ECB’s October meeting revealed that policymakers would keep the option open to raise rates if needed, even if it was not in their base scenario. The eurozone economy remains shaky with the HCOB flash Composite PMI remaining in contraction for a sixth month, hitting 47.1 in November. For the week, the pan-European STOXX 600 was up 0.9%, with most regional indices higher, however Italian and UK equity markets were slightly lower. European government bonds moved higher for the week, with the German 10-year bund yield bouncing back from a two-month low following reports that Germany would suspend its borrowing limit for a fourth year.
Japan’s Nikkei 225 added a muted 0.1% for the week despite touching a fresh 33-year high on Monday. Gains were tempered by Japan’s core consumer price index rising 2.9% year-on-year in October, slightly lower than expected but picking up from September’s figure, raising speculation that the Bank of Japan will further normalise its monetary policy. Chinese markets were mixed, with the Shanghai Composite down 0.4% while the Hang Seng index was up 0.6%. Stocks found some support from reports that financial authorities had told state-backed lenders to provide additional credit to private developers, however concerns about the property sector remain.
Argentina’s Merval index saw its best ever weekly performance, up over 42% to hit a record high. This came after Javier Milei secured victory in the weekend’s presidential election. Argentina’s international sovereign dollar bonds also advanced while the peso weakened. Most other regional indices saw more muted gains and overall MSCI’s index of Latin American equities ended the week marginally below the flatline. Oil prices were slightly weaker ahead of the delayed OPEC+ meeting this week.
The value of your investment can fall as well as rise in value, and the income derived from it may fluctuate. You might get back less than you invest. Currency exchange rate fluctuations can also have a positive and negative affect on your investments. Please note that EFG Harris Allday does not provide tax advice. Past performance is not a reliable indicator of future performance.
This document has been produced by the EFG Harris Allday research team utilising data from documents produced by EFG Asset Management (UK) Limited for use by the EFG group and the worldwide subsidiaries and affiliates within the EFG group. EFG Asset Management (UK) Limited is authorised and regulated by the UK Financial Conduct Authority, registered no. 7389746. Registered address: EFG Asset Management (UK) Limited, Park House, 116 Park Street, London W1K 6AP, United Kingdom, telephone +44 (0)20 7491 9111.