USA
Stocks displayed mixed performance as long-term rates fell amidst a cooling labour market. Hopes of an earlier Federal Reserve interest rate cut boosted the S&P 500 and S&P MidCap 400 to new record highs. Small-cap and value shares outperformed, while mega-cap tech shares lagged due to a decline in Apple. Danish pharmaceutical company Novo Nordisk replaced Tesla as the 12th biggest public company. The week began with a 1% drop in the S&P 500, attributed partly to disappointing policy news from China. The labour market showed signs of strain, with job openings decreasing, and the quits rate hitting its lowest level since August 2020. The jobs report brought initial reassurance, but concerns lingered as the unemployment rate unexpectedly rose to 3.9%. Fed Chair Jerome Powell’s testimony hinted at confidence in future rate cuts, influencing futures markets.
Europe
The pan-European STOXX Europe 600 Index gained ground for the seventh consecutive week. Major stock indexes in Italy, France, and Germany recorded positive movements, while the UK’s FTSE 100 declined. Ten-year government bond yields for Germany, Italy, and France decreased after the ECB kept its monetary policy unchanged and hinted at potential rate cuts in June. The ECB revised lower its inflation and economic growth forecasts, anticipating inflation to fall to 2.0% in 2025. The UK’s Spring Budget included a GBP 10 billion payroll tax cut and an extension of the windfall tax on oil and gas companies.
Japan
Japan’s stock markets had mixed results, with the Nikkei 225 Index slightly lower and the TOPIX Index gaining. Speculation about the Bank of Japan’s monetary policy trajectory persisted, with signs of potential interest rate adjustments. Household spending decreased sharply in January, while nominal wage growth exceeded expectations. Economic data revealed a challenging environment, impacting Japan’s exporters due to the yen’s appreciation.
China
Chinese equities gained as government measures stabilized the market. The Shanghai Composite Index and CSI 300 rose, while Hong Kong’s Hang Seng Index declined. China set an economic growth target of around 5%, issued a budget deficit target of 3%, and announced RMB 1 trillion in special ultra-long central government bonds. Premier Li Qiang outlined housing policies and technology initiatives at the National People Congress. However, analysts were underwhelmed by the lack of concrete measures. The private Caixin/S&P Global survey indicated weaker-than-expected services activity. Chinese exports and imports rose in the first two months of the year, with exports growing 7.1% and imports rising 3.5%.
|
Index |
Weekly Index |
Year to Date |
||
|
Currency |
Local |
Sterling Pound |
Local |
Sterling Pound |
|
UK |
|
|
|
|
|
FTSE 100 Index |
0.08% |
0.08% |
-1.59% |
-1.59% |
|
US |
|
|
|
|
|
S&P 500 Index |
-0.24% |
-2.03% |
8.50% |
8.19% |
|
EU |
|
|
|
|
|
Euro Stoxx 50 |
1.35% |
0.70% |
10.21% |
8.62% |
|
Asia |
|
|
|
|
|
Hang Seng Index |
-1.05% |
-3.06% |
0.27% |
-0.21% |
|
MSCI World |
0.13% |
-1.30% |
7.91% |
6.89% |
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