Today, the focus is once again on the latest data from the US labour market. The latest monthly report from private labour market service provider ADP points to a slowdown in employment growth. The development of the jobs market plays a decisive role in determining the future monetary policy of the US Federal Reserve, which is why the financial markets are paying particular attention to this.
On Wall Street, the share indices ended trading on Thursday with moderate gains. Technology stocks were particularly in demand, driven by the two AI heavyweights Alphabet (+5.3%) and AMD (+9.9%). Google parent Alphabet presented a new AI model under the name "Gemini", offering competition to ChatGPT. On the Nasdaq, the indices rose the most. The Nasdaq-100 posted a daily gain of around 1.5% and climbed above the 16,000 mark. After initial losses, the Dow Jones Industrial closed slightly higher at 36,117.38 points (+0.17%). The S&P 500 rose by 0.8% to 4,585.59 points on Thursday.
The focus today is on the labour market data from the US. If the recent signs of weakness in the employment trend are confirmed, the US Federal Reserve is likely to keep key interest rates unchanged at its last meeting next week and expectations of interest rate cuts soon are likely to be confirmed. On the bond market, the yield on ten-year US government bonds currently stands at 4.15%.
The markets in the Asia-Pacific region showed a mixed performance. In Tokyo, the Nikkei 225 lost almost 2% after revised data showed that Japan's gross domestic product in the third quarter was weaker than previously expected. The world's third-largest economy contracted by 0.7% in Q3 compared to the previous quarter (previous calculation -0.5%). South Korea's Kospi, on the other hand, rose by around 1%, with the small-cap Kosdaq index climbing by 1.9%. In Australia, the S&P/ASX 200 gained 0.3%. The Hang Seng Index in Hong Kong recovered and rose by 0.17% at the end of the week, while the CSI 300 in mainland China gained 0.5%. In India, meanwhile, the central bank kept its key interest rate unchanged at 6.5%.
Meanwhile, statements from the top management of the Bank of Japan caused capital market interest rates in Japan to rise. The yield on ten-year government bonds climbed to 0.75% and the yen rose sharply against the US dollar and the euro, while speculation about a tightening of key interest rates led to losses on the stock market. Japan's central bank chief Kazuo Ueda emphasized that the handling of monetary policy would become more difficult in the coming year and his deputy, Ryozo Himino, expressed his thoughts on the consequences of a departure from years of negative interest rates. This could increase the likelihood that the Bank of Japan will abandon years of negative interest rates, possibly as early as December 19, when it makes its last interest rate decision of the year.
In the eurozone, the statistics office Eurostat confirmed the GDP data for the third quarter yesterday. According to the data, the eurozone economy shrank by 0.1% in the summer compared to the previous quarter, as already assumed. The EuroStoxx 50 fell by 0.2% on Thursday, after expectations that key interest rates would soon fall again had recently driven the stock market barometer to its highest level since 2007.
Corporate news in focus: No important corporate data is scheduled today.
Economic data in focus: Germany consumer prices November (08:00) and from the USA the labor market report November (14:30) as well as the consumer survey of the University of Michigan for December (16:00).
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.