Markets hesitant ahead of a data-heavy week

US markets closed mixed last Friday, with the S&P 500 edging up 0.1% to 4,559.34, registering a 1% gain of the week, while the Dow Jones Industrial Average rose 0.3% to 35,390.15, marking a 1.3% weekly increase. The Nasdaq Composite slipped 0.1% to 14,250.85, posting a 0.9% weekly gain, as investors monitored Treasury yields and awaited data on early-holiday season shopping for insights into consumer health. In Europe, the Euro Stoxx 50 closed 0.25% higher on Friday, concluding the week with a 2.1% gain, with real estate shares lagging and media and retail equities performing well.

Summary for 27.11.2023

Asian markets fell this morning, with Chinese shares leading the decline after data revealed a sustained decline in China’s industrial profits, adding to concerns about the country’s economic outlook. Investor caution prevails across the region ahead of key economic data releases this week, including China’s November PMI readings, amid growing apprehensions about slowing global economic growth and uncertainty surrounding central banks’ policies.

US equity futures dipped lower overnight after a four-week winning streak, with investors cautious about consumer spending signals, while European markets watch US developments and key updates, including Eurozone inflation, as US 10-year rates stand at 4.492%.

Oil prices declined in Asian trade amid uncertainty over potential production cuts by OPEC+ following a delayed meeting, while concerns about increasing output from some OPEC+ members and global economic conditions weighed on market sentiment. Traders remained cautious ahead of key economic readings, including euro zone inflation and Chinese PMI data, with a focus on potential impact on crude demand.

Profits at China’s industrial firms grew for a third consecutive month in October, but at a slower pace, indicating the need for further policy support to bolster the country’s economic growth, particularly amid soft global demand. The 2.7% year-on-year rise in profits narrows from previous months, prompting calls for additional stimulus measures as China’s economy faces challenges from housing market distress, local government debt risks, slow global growth, and geopolitical tensions.

Elon Musk is set to meet Israeli President Isaac Herzog today to discuss rising antisemitism online, as civil rights groups accuse Musk’s X social media platform of amplifying anti-Jewish hatred. The meeting coincides with a four-day truce in the Israeli-Hamas conflict, during which 40 hostages held by Hamas in Gaza have returned to Israel.

Xiaomi reported impressive Q3 financials for 2023, with revenues reaching the equivalent of $9.9 billion and net profits surging to $840 million, showcasing significant profitability growth compared to the same period last year. The success is driven by the smartphone segment, contributing over $4.8 billion, and IoT and lifestyle technology solutions, contributing around $2.9 billion, with Xiaomi actively pursuing further growth through innovation and AI integration in its product lineup.

Analysts have raised the one-year price target for HSBC Holdings to $10.28 per share, indicating a potential increase of over 33% from the recent closing price of $7.71. The optimistic outlook is supported by a notable surge in institutional interest, with fund ownership increasing by more than six percent, although Fidelity has slightly reduced its holdings in HSBC.

On September 19, BlackRock reported a 5.26% combined stake in Noble Corporation, a prominent offshore drilling contractor, signalling confidence in Noble’s market position and growth potential.

Shares of Visa Inc. experienced an impressive rally in November, reaching an all-time intraday high of $254.70 and closing Friday at $254.30, marking its longest consecutive gains since January 2020 and potentially making November its most profitable month since September 2010. The financial services giant’s resilient performance, with a year-to-date rise of over 22%, signals strong growth potential and positions Visa for its best annual performance since 2021.

Investors will this week closely watch inflation data, including the US PCE price index on and Euro zone inflation on Thursday, for insights into the timing of potential changes in global interest rates. Additionally, focus remains on the OPEC+ meeting to discuss oil output cuts and China’s purchasing manager indices, all expected to influence market sentiment and provide insights into economic conditions.

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