Global Market Quick Take: Europe – 19 November 2024

Equities: US markets rebounded modestly; HSI rose 0.8%; Europe ended slightly lower

Volatility: Nvidia earnings tomorrow expected to drive market swings

Currencies: USD eases lower as US treasury yields dip slightly. Sterling eyes CPI tomorrow.

Commodities: Gold and crude rebound on dollar softness and geopolitical tensions

Fixed Income:US Treasuries rebound as European bonds fall on reduced ECB rate cut expectations.

Macro events: US Housing Data and Canadian CPI, China rate announcement

RBA minutes indicated a continued restrictive policy until inflation targets are met. The RBA remains open to future adjustments, with markets not expecting a rate cut until May, and February at 38% probability.

Trump 2.0 cabinet announcements remain in focus as a clear gauge of the agenda starting January. After getting the China hawks in key trade roles and emphasising tariff policy, Trump has picked the CEO of Liberty Energy Chris Wright, a vocal advocate of oil and gas development, as the Energy Secretary. Trump team is also considering pairing former Fed governor Kevin Warsh in the Treasury secretary role with Scott Bessent as director of the White House’s NEC. Former Congressman Sean Duffy was tapped for Transportation. We discuss more about Trump’s cabinet cabinet nominations in this article.

Bank of Japan’s Governor Ueda held a press conference yesterday but avoided giving any clear signals on the potential for a December rate hike. This was interpreted by the market to be less dovish than expected as there was a clear lack of urgency on further policy normalization.

There was a slew of ECB speak but the highlight came from Makhlouf who stated that evidence would need to be "overwhelming" for him to back a 50bps rate cut next month. Money markets are currently pricing in a 25% chance of a 50bps cut in December, although rate expectations are likely be further fine-tuned by Friday's flash PMI data.

A run of robust U.S. data combined with expectations of faster inflation under Trump's higher-tariff, tighter-immigration policies have seen bets for a December rate cut pared to around 58% on CME FedWatch, from greater than 65% odds a week ago.

Tuesday: Lowes, Medtronic, Walmart, Dollar Tree

Wednesday: TJX Companies, Target, Nvidia, Palo Alto Networks

Thursday: Intuit, PDD Holdings, Deere & Co.

US: The S&P 500 rose 0.4% and Nasdaq 100 gained 0.7% as markets rebounded from last week’s declines, led by Tesla’s 5.6% rally on plans for a federal framework for self-driving regulations. That same news saw Uber dropping heavily yesterday, down over 5%. Super Micro surged 40% postmarket after resolving compliance issues with Nasdaq and hiring a new auditor. However, the Dow slipped 0.13%, marking its fourth loss in five sessions. Palantir dropped nearly 7% after a board member deleted his X account, after having posted about moving the stock to the Nasdaq exchange next week, the rationale being it would “force billions in ETF buying” among retail traders.

Hong Kong: The HSI climbed 0.8%, snapping a six-day losing streak as Beijing encouraged companies to boost share prices through buybacks and dividends. Gains in tech and consumer sectors offset lingering pressure from weak economic data and Morgan Stanley’s downgrade of Hong Kong equities to "underweight."

Europe: European indices closed slightly lower, with Stoxx 50 down 0.2% and Stoxx 600 slipping 0.1%. Retail stocks fell 0.9%, dragging markets, while miners gained 0.6%. Key names like Novo Nordisk and ASML saw losses, while SAP, LVMH, and Nestlé posted modest gains. Caution lingered as investors awaited wage growth and inflation data.