Initial jobless claims unexpectedly dropped to 213,000 for the week ended 16 November, its lowest figure since April 2024, while S&P Global’s composite purchasing managers’ index (PMI) rose to 55.3 in November, a 31-month high. Ongoing economic resilience helped to overshadow some of the concerns around how the incoming Trump administration is shaping up as well as rising tensions between Russia and Ukraine. Another focal point of the week was Nvidia’s earnings. The chipmaker’s stock saw choppy trading as investors weighed up third quarter revenue nearly doubling from a year ago, but slowing from the prior quarter as well as fourth quarter guidance falling slightly short of some lofty expectations.
For the week the S&P 500 added 1.7%, with gains broad-based. The tech-heavy Nasdaq Composite was up 1.7% while the Dow Jones Industrial Average rose almost 2%. Meanwhile small-caps fared even better, with the Russell 2000 up over 4%. Treasury action was mixed, with long-term yields declining while short-term yields made some gains. For the week the 10-year Treasury note ended at 4.42%, little changed from the prior week. The dollar index saw its third consecutive weekly rise, and the euro fell to its lowest level against the US dollar in nearly two years.
The pan-European STOXX 600 managed to end higher, snapping a four-week losing streak. The index was up 1.1%, helped by strong performance seen on Friday, fuelled by rate-sensitive real estate stocks. This came after the HCOB eurozone composite PMI unexpectedly fell into contractionary territory in November, dropping from 50 to 48.1, with the deterioration raising hopes that the European Central Bank would once again ease policy at its next meeting in December. In contrast, the Bank of England is not currently expected to make any more cuts this year, after October inflation rose more-than-expected. Regional performance was mixed, with the UK FTSE 100 up 2.5%, the German DAX up 0.6%, while Italian and French indices were lower.
Japan’s Nikkei 225 declined 0.9% for the week, with risk appetite dampened by a missile exchange between Ukraine and Russia. This was despite the government approving an economic package aimed at easing inflation pressures. Earlier in the week inflation remained above the Bank of Japan’s 2% target. Chinese markets also experienced weakness amid ongoing concerns over the potential Trump policies. The Hang Seng dropped 1%, while on the mainland the Shanghai Composite lost 1.9%. The one-year and five-year loan prime rates were left unchanged by the central bank, as expected.