US equity markets closed higher ahead of Thanksgiving, with small-cap shares leading gains. Long-term government bond yields briefly fell to a two-month low before rebounding on higher consumer inflation expectations. Nvidia’s strong earnings, despite concerns about export restrictions on China, contributed to the technology sector’s positive performance. The S&P 500 and Nasdaq Composite both reached new four-month highs. In Europe, equities rose to a two-month high, driven by real estate shares while the FTSE 100 lagged due to weak crude prices and an OPEC+ meeting delay.

Summary for 23.11.2023

Most Asian markets traded in a tight range with muted trading volumes on Thursday as investors awaited cues from major economies. Negative cues from the US, including lower-than-expected weekly jobless claims and somewhat hawkish signals from the Federal Reserve, influenced the sentiment. Chinese shares were subdued, but Goldman Sachs expressed optimism for a positive 2024 with potential stimulus measures. The broader Asian markets were mixed, with gains in South Korea but declines in Australia and Hong Kong.

European shares may struggle for direction as investors await minutes from the ECB’s October meeting. Meantime US market will remain close today for Thanksgiving and will close early on Friday.

Oil prices fell by over 1% this morning, extending losses from the previous session, as OPEC+ postponed a ministerial meeting, fuelling speculation of potential reduced output cuts. Disagreement over output quotes for African members, including Angola and Nigeria, contributed to market uncertainty, while concerns over robust global supplies persist.

Major Chinese property shares saw a boost on Thursday as Shenzhen, one of the country’s industrial centres, reduced the down payment required for second home buyers, aiming to stimulate sales amid a downturn in the property market. The move, along with speculation over a government whitelist of 50 local developers for quick funding, drove gains in property shares, including Country Garde and Sunac China Holdings, amid ongoing challenges in the sector marked by a severe sales and priced downturn over the past three years.

Weekly initial jobless claims in the US came in lower than expected at 209k, alleviating concerns about recent upticks and suggesting ongoing support for the labour market. The data indicate a gradual decline in job openings, contributing to a balanced supply and demand for labour in 2024, supporting the Federal Reserve’s efforts to manage inflation without a sharp increase in unemployment.

New orders for US durable goods experienced a significant decline of 5.4% in October compared to the previous month, the second-largest drop since April 2020, driven by reduced demand for transportation equipment, including civilian aircraft and vehicles. Additionally, orders for non-defense capital goods excluding aircraft, a key indicator for business spending, decreased by 0.1%, following a revised 0.2% decline in September.

Berkshire Hathaway has undergone significant changes to its investment portfolio recently, divesting from long-standing holdings like General Motors, United Parcel Service, Mondelez International, Procter & Gamble, and Johnson & Johnson. The moves, influenced by economic pressures and strategic shifts were undertaken during the third quarter, leading to a record $157 billion in cash reserves.

Deere & Co forecast 2024 profit below analysts’ expectations, citing high borrowing costs and tighter budgets that may dampen demand for its agriculture and construction machinery. The announcement led to a 3.1% drop in Deere’s shares as the company anticipates a downturn in sales across all regions for the fiscal year ahead, reflecting concerns that demand may have peaked for major industrial companies.

Shares of British software firm Sage surged by 14.3% to a record high after reporting an 18% rise in full-year underlying operating profit and said margins would continue to increase this year. The company also announced a £350 million share buyback programme.

Thyssenkrupp reported a €2.1 billion impairment on its steel unit, resulting in a €2 billion net loss for Q4. Despite stell market challenges, the company posted its first positive free cash flow in seven years, boosting shares by 6.6%.

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