On Friday, the November non-farm payrolls data was released, whereby 227,000 jobs were added, slightly higher than expectations and an improvement October’s upwardly revised 36,000. Meanwhile unemployment ticked slightly higher to 4.2%. Investors welcomed the report, and it supported expectations that the Federal Reserve would cut rates by 25 basis points at its December meeting. Earlier in the week, comments from Fed governor Christopher Waller indicated that he was in support of a coming cut.
For the week, the S&P 500 added 1% to end at a record high. Sector performance was mixed, with consumer discretionary, communication services and information technology seeing strong gains, while other sectors were in the red, with the more value-tilted sectors like energy and utilities lagging. The Nasdaq Composite climbed 3.3% for the week, also ending at a fresh record, while the Dow Jones Industrial Average dropped 0.6%, slipping from a record high. Treasury yields edged lower, dipping after the release of the non-farm payrolls report. The yield on the 10-year Treasury note ended at 4.15%.
One of the notable events of the week was the collapse of the French government. Following growing tensions over the proposed 2025 budget of spending cuts and tax hikes to tackle the deficit, the far-right National Rally and left-wing New Popular Front brought forward a no confidence vote. 331 lawmakers in the 577 member voted in favour of ousting the government, with Prime Minister Michel Barnier resigning on Thursday. Despite the political uncertainty, France’s CAC 40 ended 2.7% higher. Gains were also seen across Europe, with the STOXX 600 2% higher and on a seven-session winning streak.
Political instability was also unexpectedly seen in South Korea. On Tuesday, President Yoon Suk Yeo declared martial law, citing threats to democracy, only to quickly reverse his decision after a sharp backlash. This prompted opposition parties to call for his impeachment and the crisis could potentially impact its international relations. For the week the Kospi fell 1.1%. Elsewhere in the Asia Pacific region, Japan’s Nikkei 225 added 2.3%, helped by a weakening of the yen. Meanwhile, Chinese markets advanced on hopes for additional stimulus measures, ahead of its Central Economic Work Conference this week which will set the agenda for the next year. Both the Hang Seng and Shanghai Composite added 2.3%.