Market Update

It was a relatively calm week as markets eased into the Thanksgiving holiday. In the US, markets observed closures on Thursday and limited hours on Friday, prompting global markets to seek guidance elsewhere.
In the UK, post Chancellor Jeremy Hunt's Autumn Statement, markets remained subdued. Notable cuts to business taxes and National Insurance aimed to boost business investment and economic growth. Current growth projections for the UK stand at 0.6% for this year, with gradual increases anticipated in 2024 and 2025.
Despite ongoing cost of living concerns, the UK Consumer Confidence indicator rose to -24 in November from -30 in October, surpassing expectations and reflecting a cautiously optimistic consumer sentiment.
In Europe, Germany's economy contracted by 0.1% in the third quarter, aligning with initial estimates and indicating challenges related to high energy costs and rising interest rates. European stock markets closed positively on Friday, influenced by European Central Bank President Lagarde's 'wait and see' approach to changes in the bank rate for the region, although she emphasized that efforts to combat inflation are ongoing.
In Japan, core inflation reached 2.9% in October 2023, raising questions about the Bank of Japan's monetary policy. The market closely watches for potential shifts as the BOJ's last policy meeting of the year approaches. The BOJ attributes cost pressures to higher global commodity prices and a weaker yen, not indicating price gains driven by domestic demand and wage growth.
In the US, new orders for durable goods fell by 5.4% in October 2023, primarily due to a substantial decline in civilian aircraft orders and the United Auto Workers' strike against Detroit's "Big Three" automakers. Excluding defense spending and the more volatile transportation category, durable goods orders have shown steady growth this year.
Upcoming economic reports include US GDP Q2, Chinese PMI, and Eurozone Inflation. US investors await the Fed's preferred measure of inflation, Core PCE MoM, and consumer confidence.
The UN Climate Change Conference – COP 28 begins on November 30, and OPEC+ is set to meet on the same day to discuss supply. Reports suggest disagreements among members over production cuts.