The American stock markets saw significant declines on the trading day, putting an end to the seven-day positive trend for the S&P 500 index. Several new macroeconomic figures were released on Wednesday, including the expected 2.8 percent increase in the US gross domestic product in the third quarter, with new jobless claims in line with expectations at 213,000. However, the major macro event was the US Federal Reserve’s preferred measure of PCE inflation, which rose by 0.3 percent. Data suggests that the US economy remains strong, strengthening the argument for future interest rate cuts, as analysts now believe that rates are hindering growth, according to Reuters. Market concerns stem from President-elect Donald Trump’s promise of tariffs on Mexico, Canada, and China, which are expected to lead to price increases, weigh on global growth, and potentially trigger a trade war with China. Individual companies like Dell and HP released quarterly reports that fell below expectations, leading to heavier declines for both stocks. The broad S&P 500 index traded down 0.4 percent, the Dow Jones Industrial Average down 0.3 percent, and the Nasdaq Composite Index down 0.6 percent.
Commodities traded on both sides of the zero line yesterday. Oil traded sideways after data showed that US crude oil inventories decreased by 1.8 million barrels last week, compared to the expected 605,000 barrels. The ceasefire between Israel and Lebanon that came into effect on Wednesday weighed on oil prices, as previous conflicts had the opposite effect in the shadow of the threat to Iran’s oil exports. Earlier this week, the Organization of the Petroleum Exporting Countries (OPEC) announced that they might delay their decision to increase oil production in January due to reduced global demand and rising production from other parties. WTI crude oil and Brent crude oil both traded sideways yesterday at $68.7 and $72.8 per barrel, respectively.
Base metals traded mixed, with lead and zinc as the day’s winners, up 2.5 percent, followed by copper, up 0.6 percent. Aluminum declined by 0.3 percent, and nickel by 0.5 percent. Tin was the day’s loser, dropping by 3.1 percent. Gold edged higher yesterday after hitting a one-week low on Tuesday. The increase in the price of gold is due to a weaker dollar, offset by US inflation data indicating that inflation in the country is decreasing at a slower pace. Gold rose by $2.3 to $2,635.1 per ounce.
Among individual US stocks, Dell and HP fell by 12.3 and 11.7 percent, respectively. MicroStrategy surged by 9.9 percent after Tuesday’s sharp decline and is now up 515 percent since the beginning of the year, while Tesla traded down by 1.6 percent and Nvidia by 1.2 percent. Urban Outfitters stood out with an 18 percent increase.
The US ten-year bond yield decreased by 3 basis points to 4.26 percent.
Asian markets opened Thursday with mixed trading, with Chinese markets falling on increased inflation concerns in the US and the risks of a potential trade war due to Trump’s promised tariffs. In Japan, the yen has weakened slightly this morning after rebounding by 2.4 percent since the US election. The Bank of Japan is expected, with a 55 percent market probability, to raise rates next month after pursuing a low-interest rate policy for an extended period. At 07:30, the Hang Seng Index in China was down 1.1 percent, while the Shanghai Index traded sideways. The Nikkei 225 Index in Japan rose by 0.5 percent.
On the Stockholm Stock Exchange, the reporting front remains calm, with Saniona set to report later this morning. Among today’s new recommendations, Elekta’s target price was lowered by SEB, which reiterated a hold rating, while JP Morgan and Carnegie reiterated underweight and buy ratings at 60 (70), 63 (71), and 90 (95) kronor, respectively. JP Morgan, however, raised the target price for Tele2 to 114 kronor (104) and Telia to 33 kronor (31) while maintaining neutral ratings for both. BNP Paribas downgraded Alfa Laval from neutral to outperform with a target price of 450 kronor and upgraded Assa Abloy from neutral to outperform with a target price of 375 kronor.
On the macro front, Thursday is expected to be a quiet day. The day begins domestically at 08:00 with Statistics Sweden releasing the trade balance for October, followed by the Swedish Business Climate and Consumer Confidence Index for November at 09:00. The Spanish Consumer Price Index will be published by the National Institute of Statistics, followed by the German CPI figures for November on an annual basis at 14:00. In the US, the markets are closed today for Thanksgiving. Notable speeches include Elderson from the European Central Bank at 14:00 and Lane at 18:00.