New York:Global markets began the new week on a positive note, spurred by falling oil prices and gains in technology stocks. This comes after a mixed week influenced by the US midterm elections, Middle East developments, and macroeconomic data releases.
According to Anadolu Agency, the US economy's growth, coupled with rising personal expenditures, suggests that inflationary pressures might continue in the near future. October saw a rise in US nonfarm payrolls by 165,000, surpassing expectations, while average hourly earnings increased by 0.4% month-on-month, also exceeding projections. These factors highlight the strength of the US labor market and have led to anticipations of further interest rate hikes by the Federal Reserve.
The recent Democratic sweep in the midterm elections has mitigated some uncertainty, but concerns about the costs of artificial intelligence (AI) investments and regulatory risks are now at the forefront. The semiconductor and AI sectors have been pivotal to the US economy's growth, with analysts predicting that limits on AI investments set by Democrats will remain manageable. Additionally, Fed officials have identified inflation as a primary concern, aiming for its timely reduction to bolster growth and employment.
In other developments, the US 10-year Treasury yield increased by three basis points to 4.89%. The Treasury Department has added eight Canadian money services businesses to its sanctions list, accusing them of aiding Tehran in circumventing sanctions and engaging in illicit financial activities. Meanwhile, Treasury Secretary Scott Bessent has urged China to adhere to its commitments under the Busan agreement during a meeting with Chinese Vice Premier He Lifeng.
US President Donald Trump has commented that another attack on Iran is unlikely, provided that discussions on Iran's nuclear program and the reopening of the Strait of Hormuz continue. Brent crude oil for January delivery slightly decreased by 0.1% to $98.30 per barrel, while the US dollar index fell by 0.2% to 102.1 as oil prices declined. Gold, in contrast, saw a rise of 1.4%, trading at $4,124 per ounce.
In the tech industry, chip manufacturer Nvidia has announced an investigation into its founder and CEO, Jensen Huang, following claims of him being a target of foreign intelligence. Investors are closely watching the earnings reports from CoreWeave, Cisco, and Applied Materials this week, as these will impact AI stocks.
The New York Stock Exchange concluded November 6 with a mixed trend; while there was a decline in chip stocks and a tech sell-off due to concerns over a potential slowdown in US AI investments, certain shares like Micron Technology, Nvidia, AMD, and Intel saw significant gains. The Dow Jones Industrial Average fell by 0.46%, whereas the S&P 500 and Nasdaq experienced increases of 0.31% and 1.09%, respectively.
European stock markets faced declines on November 6 due to AI-related concerns. Shares of Munich Re fell by more than 4% following a downgrade by JPMorgan, and Daimler Truck shares also dropped despite reporting higher profits. In political news, Spanish economist Pablo Hernandez de Cos and Dutch economist Klaas Knot have been nominated to succeed Christine Lagarde as the president of the European Central Bank. European indexes started Monday with mixed trends, with Germany's DAX 40, the UK's FTSE 100, France's CAC 40, and Italy's FTSE MIB 30 all experiencing losses.
Asian markets, however, were buoyant near Monday's close thanks to a tech rally. Taiwan's Finance Ministry and financial regulator have indicated they will address investor concerns. In China, the consumer price index rose by 0.7% year-on-year in October, below expectations, while the producer price index saw its fastest rise since June 2022. Asian indexes like Japan's Nikkei 225, South Korea's Kospi, China's Shanghai Composite, and Hong Kong's Hang Seng all recorded gains.