Friday's Markets Update (November 29, 2024)

30 Nov 2024 by rate3

On Friday, equities closed higher, with the S&P 500 and Dow reaching new ATHs. Tech stocks, particularly semiconductor companies, rallied on news of less stringent export restrictions to China. Retailers also gained due to strong Black Friday sales. In the EU, inflation continued to rise, indicating stagflation as the Euro fell to a yearly low. India's GDP slowed further, marking a year of contraction, with the rupee at a record low. At the same time, the Brazilian economy continued to show growth, with record employment, although it experienced a real depreciation of 20% YoY, driven by increasing government spending. BTC is slowly aiming to reach $100K again, while ETH has started to consolidate under $3.7K, with $4K already on traders' minds.

Crypto

The Trump administration plans to expand the CFTC's authority to oversee significant parts of the $3 trillion digital asset market, aiming for a more innovation-friendly regulatory framework. The CFTC would regulate spot markets for major cryptocurrencies like BTC and ETH while overseeing trading exchanges. Supporters believe the CFTC's expertise in derivatives markets positions it well for this role. The initiative is part of a larger effort to shift US financial regulation and counter the SEC’s stringent policies. (source)

World Markets

Euro Area consumers expect inflation to rise over the next 12 months, reversing a downward trend (it increased for the first time in 9 months to 2.5%). However, expectations for economic growth have worsened, while unemployment expectations have improved slightly. 1Y trend: "Down". Eurozone inflation rose to 2.3% in November 2024, driven by a smaller decline in energy prices compared to last year. Core inflation remained steady at 2.7%. Month-over-month, prices fell slightly. 1Y trend: "Down". (EU)
German unemployment remained stable at 6.1% in November (11.5% in Apr 1950, 0.5% in Feb 1966, 11.7% in Dec 1997, 12.1% in Mar 2005, 5% in Jan 2019). While joblessness increased slightly, it was below expectations. However, job demand weakened, signaling a slowing labor market. 1Y trend: "Up" (source)
India's GDP grew at a slower pace of 5.4% in Q3 (6.5% previous), missing expectations. The slowdown was primarily due to weaker manufacturing and utility sectors. While services and agriculture sectors showed growth, the overall economic momentum softened. 1Y trend: "Down" (Mopsi)
Turkey's GDP growth slowed to 2.1% in Q3 2024, the weakest pace in over two years. High interest rates and declining exports contributed to the slowdown. The economy contracted QQ for the first time since 2018. 1Y trend: "Down" (TR)

Currencies

The Euro has weakened significantly (1.06) in November, its worst monthly performance in over a year, falling about 3% against the dollar. This is due to factors such as tariffs expectations, weak Eurozone growth, political instability in Germany and France, and prognosis of ECB rate cuts. Despite recent inflation data, concerns about economic stagnation and geopolitical risks persist, leading to a bearish outlook on the Euro. 1Y trend: "Side"
The Brazilian real strengthened after hitting a record low (6.05, 20% decline YoY), following reassuring statements from political leaders regarding fiscal policy. The country's strong labor market, with unemployment at a record low (6.2%), also supported the currency. However, weaker global demand for Brazilian commodities from China and reduced capital inflows continue to put pressure on the real. 1Y trend: "Up, Depreciating"
The Indian rupee hit a record low of 84.6 per dollar due to slower-than-expected GDP growth, capital outflows, and a stronger dollar. Concerns about the RBI's monetary policy stance and global geopolitical tensions further weakened the rupee. 1Y trend: "Up, Depreciating"

On Week 49, key economic indicators will be released, including the November jobs report, Fed speeches, and various manufacturing and consumer sentiment data. Globally, GDP data from South Africa, Brazil, and Australia, along with unemployment rates from the Euro Area and Canada, will be released. Additionally, manufacturing and services PMIs from various countries, including China, South Korea, and European nations, will be closely monitored. India's interest rate decision and inflation data from several countries will attract traders attention.