S&P wraps up best month of 2024

General market commentary

The final trading day of November saw U.S. equities continue their upward trajectory, culminating in record closing highs for the S&P 500 and Dow Jones Industrial Average. Although the Dow briefly surpassed the 45,000 mark during intraday trading, it settled slightly below, still securing an all-time closing best. Retailers drew attention amid Black Friday shopping activity, but market momentum was driven more by quiet optimism and developments overseas than by domestic data or earnings. The Nasdaq Composite also posted robust gains, while smaller-cap shares tracked by the Russell 2000 advanced, reflecting broad market strength.

Treasury yields retreated, with the 10-year yield slipping to 4.19%, as the dollar index eased slightly. European data revealed a rise in the Eurozone’s annual inflation rate to 2.3%, in line with expectations, while Japan’s inflation figures also exceeded forecasts. With the Federal Reserve’s December meeting approaching, market participants are pricing in a higher likelihood of a 25-basis-point rate cut, highlighting the cautious optimism underpinning market sentiment. December promises a wealth of new information, including unemployment data, manufacturing reports, and consumer sentiment figures, which could shape the outlook as the year draws to a close.

Latest market update

Most Asian markets saw gains on Monday, with Chinese equities leading the way following positive factory activity data, although U.S. President-elect Trump's tariff threats tempered overall performance. Gains were modest across the region, with Hong Kong, South Korea, and Malaysia posting small increases, while India's Nifty 50 saw a slight decline.

US equity futures were little changed on Monday as investors await key economic data, including US manufacturing and construction spending figures. Market attention is also on speeches from Federal Reserve officials, with traders looking for further cues on the economic outlook.

The Euro STOXX 50 gained 1% on Friday, supported by strong performances from Airbus, Schneider Electric, ASML, and Infineon, which helped offset losses in the auto and banking sectors. However, the index still closed 3% lower for November, with notable declines from companies like Volkswagen and BNP Paribas.

The US dollar strengthened above 106.2 on Monday, benefiting from resilience in the US economy and a pullback in the euro, which was pressured by political uncertainty in France. The euro traded at 1.0525 against the dollar, reflecting concerns over domestic instability and market expectations for future interest rate moves.

Oil prices edged higher in Asian this morning, supported by positive economic data from China and bargain buying after last week's losses, though concerns over U.S. tariff threats limited gains. Markets are now focused on this week's OPEC+ meeting for potential supply signals, as the group is expected to delay plans to increase production amid weak demand forecasts.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Stellantis CEO Carlos Tavares resigned unexpectedly amid a 40% drop in the company's share value and declining sales, particularly in North America. Tensions between Tavares and the board, along with criticism from dealers and shareholders, led to his departure, with an interim committee now set to oversee operations until a new CEO is appointed.

Volkswagen workers in Germany will begin warning strikes on today, following a breakdown in negotiations over wages, layoffs, and potential plant closures amidst competition from China and declining demand. Labour union IG Metall has warned of an unprecedented collective bargaining battle, while Volkswagen emphasises the need for cost-cutting and constructive dialogue.

Mercedes-Benz plans to invest $75 million in Chinese autonomous driving startup Momenta, using its software in at least four models in China from 2025 to 2027, with potential expansion to other markets. The move aims to regain market share in China, where competitors like Tesla and Nio lead in electric vehicles and smart-driving technology.

HSBC has begun the search for its next chairman, as Mark Tucker plans to step down by 2026, with headhunters considering both internal and external candidates. Tucker, the bank's first chairman from outside HSBC, has overseen a strategic pivot towards Asia during his tenure.

Hertz is making progress in reducing fleet costs and improving liquidity, with Deutsche Bank analysts raising their price target to $4.45 from $3.20 while maintaining a "hold" stance. They note, however, that the company faces challenges in achieving cost targets, regaining market share, and optimising revenue.

Bank of America upgraded European equities to overweight, citing improving growth momentum and undervalued opportunities, despite a projected global slowdown. The analysts see small-cap shares and defensive names outperforming, with a potential recovery in European markets driven by factors such as improved credit conditions and a possible fiscal boost.

Standard & Poor's maintained France's credit rating at "AA-" with a stable outlook, expecting gradual fiscal consolidation despite political uncertainty and delays in approving the 2025 budget. Meanwhile, Moody's rates France at A2a with a negative outlook, while DBRS maintains a stable AA (high) rating.

Upcoming data and events

This week, key US data will include the November jobs report, ISM PMIs, and speeches from Federal Reserve officials, while global attention will also be on GDP growth figures from South Africa, Brazil, and Australia. Additionally, inflation updates, manufacturing and services PMI reports, and key trade and factory order data will be released from countries including China, Germany, and South Korea.

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