Market snapshot: sky of blue and sea of green for now

It's the same story in the US where investors keep buying tech and moving major indices higher. There have been gains in the UK, too, though less spectacular. ii's head of markets has the latest from around the globe.

3rd December 2024 08:21

Richard Hunter from interactive investor

The benchmark and technology indices continued their march higher, rising to new record highs based on a number of separate stock developments.

A broker upgrade lifted Tesla Inc (NASDAQ:TSLA), while Amazon.com Inc (NASDAQ:AMZN) rose as Cyber Monday began and Apple Inc (NASDAQ:AAPL) rose to a fresh record level.

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Elsewhere, Super Micro Computer Inc (NASDAQ:SMCI) raced almost 30% ahead after allegations of misconduct and inaccuracies in its financial statements were found to be baseless. It was not all positive, though, with Intel Corp (NASDAQ:INTC) ending lower and bringing its loss in the year to date to 50% after having recently been replaced in the Dow Jones by NVIDIA Corp (NASDAQ:NVDA). The company is now searching for a new CEO and is committed to restoring investor confidence in what has been a tumultuous time with its rivals continuing to race ahead.

The focus on individual stocks will switch as the week progresses, with the non-farm payrolls report on Friday the clear highlight. There will also be job openings and weekly unemployment data, all of which will feed into Federal Reserve thinking to different degrees ahead of its rate decision later this month. Comments from a Fed governor were non-committal, stating that another cut was possible, but was dependant on no inflation data surprises to the upside.

The dollar also strengthened as investors assessed the latest Trump tariff implications, with the latest salvo being aimed at the so-called “BRICS” countries which include Russia, India and South Africa as well as China. For the moment, the rhetoric is loud but the true acid test will come after the inauguration next month when any measures are confirmed and, in turn, giving a time lag as they wash through.

Even so, the US-centric mindset has kept investors with a risk-on approach and, in the year to date, the Dow Jones is ahead by 18.8%, the S&P500 by 26.8% and the Nasdaq by 29.3% with the main indices continuing to test or breach new highs.

Asian markets were also positive, with an emerging school of thought that Japan could escape some of the threatened tariffs and actually benefit from tariffs imposed on countries elsewhere. The Nikkei rose by 2% to bring its performance so far this year to a positive 18%, even after the early August decline following an unwinding of the carry trade.

Chinese markets had another promising session following the manufacturing data from the day previous, with something of a relief rally that the new measures announced by President Biden were not as punitive as had been feared in terms of Chinese access to AI chip components.

In addition, there is some optimism ahead of the upcoming economic work conference which should outline growth plans and any stimulus plans for next year. Sentiment remains brittle however, given comments from the President elect on tariffs with particular focus on China, at a time when the economy is showing small signs of finally finding its feet.

UK markets opened on the front foot, despite the tendency of international investors to be focused almost entirely on events and the strength of the markets Stateside. Drivers for the early gains came from the likes of Ashtead Group (LSE:AHT) and easyJet (LSE:EZJ), with Persimmon (LSE:PSN) reversing some of the previous day’s losses as each received the benefits of broker upgrades. Banking and mining stocks were also subject to some bargain hunting from investors, although of late there has been a tendency for initial optimism to be short-lived.

The prospects for the domestic economy have weighed on sentiment, especially with the impact of the Budget likely to wash through next year, let alone any volleys which may be coming from the other side of the pond.

The progress of the primary index has been measured but unexceptional compared to many other developed markets and the FTSE100 has now added 7.9% so far this year, unable as yet to repeat the highs recorded in May.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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