Economic data serves as catalyst for global markets

  • Market Overview

European stocks advanced for a second consecutive session on Friday following a spate of economic data that depicted a more optimistic picture of development across the continent, alleviating some of the region's recession fears. Britain’s PMI for October 2023 moved back into expansion territory, with markets reacting by lifting expectations of a rate hike (22%) in 1Q24.

US stocks were mixed on Friday as traders assessed the latest corporate events and key economic data. US manufacturing output fell more than expected in October 2023, while services rose at a faster pace. US Treasury securities sold outside of the US also incurred losses, causing Apple (NASDAQ: AAPL ), Meta (NASDAQ: META ), and Microsoft (NASDAQ: MSFT ) to drop about 1% each.

Asian stocks were also mixed as investors assessed key economic data in Japan. Reuters reported that “Japan’s headline inflation rate accelerated to 3.3% in October from 3% in September, pointing to the highest reading since July. Preliminary data also showed that business activity in Japan slowed to an 11-month low in November amid persistent weakness in the manufacturing sector.”

With investors keeping a close watch on economic data and speculating about the future trajectory of interest rates, the FTSE/JSE All Share Index (ALSI) had a solid finish to the week. However, gains were limited as investors were still digesting the latest policy decision, with South African Reserve Bank Governor Lesetja Kganyago striking a hawkish tone in response to Wednesday's hotter-than-expected October inflation figures. For the week, the local bourse added 2.42%, lifted by gains in retailers, food producers and banks. At 18h00 on Friday, the rand had weakened 0.30% to R18.85/$, 0.54% to R20.61/€ and 0.90% to R23.76/£.

Oil prices continued to fall on Friday after OPEC+ said its postponed policy meeting will take place virtually rather than in person. The delay, as well as disagreements among members over quotas, have placed doubt on the possibility of further production cutbacks. Brent crude lost nearly 2% trading at $80.85 a barrel at 18h15 local time. Gold gained 0.29% to trade at $1 997.84/oz, while platinum gained 1.53% to $930.13/oz.

PSG Wealth Daily Investment Update, 27 November 2023

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