In the last weekly market sense check of the year, global financial markets have had a strong reaction to the U.S. Federal Reserve's final policy decision of 2024.

In brief:

Fed's Hawkish Rate Cut Signals Slowdown: The Fed’s latest decision to cut interest rates by 25 basis points was paired with a forward-looking stance indicating a slower pace of monetary easing in 2025. Despite this reduction, the Fed projects only two more cuts next year.

Economic Data and Market Reactions: Following the Fed's announcement, U.S. stock markets experienced significant declines, and the U.S. dollar strengthened. Additionally, disappointing U.S. retail sales and industrial production figures contrasted with surprisingly strong Australian employment numbers, painting a mixed picture of the global economic landscape as 2024 comes to a close.

Global Central Banks on Hold: The Bank of England and the Bank of Japan maintained their current interest rates, reflecting ongoing concerns about inflation and economic conditions. This conservative stance highlights the diverse challenges facing global economies, with each central bank taking a measured approach to future policy adjustments.


Get access to the charts: www.investsense.com.au/industry-articles/financial-markets-digest-feds-hawkish-cut-as-central-banks-make-final-moves-of-2024 


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Last week highlighted growing signs of a slowing global economy as central banks signalled further rate cuts may be on the horizon.


Topics Covered:

• Central Bank Rate Cuts in Focus
• U.S. Jobs Report: Mixed Signals for the Labour Market
• Europe Grapples with Economic Stagnation

Get access to the charts: www.investsense.com.au/industry-articles/central-banks-poised-to-cut-rates-amid-sluggish-growth 

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Last week, markets reacted to President-elect Donald Trump's heated trade rhetoric and central banks signalling a slower pace for interest rate adjustments.

Topics Covered:

• Trade tensions escalate amid Trump rhetoric
• Central banks signal a shift in rate policy
• Large-Caps Vs Small Caps in the post-election market 

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Market Summary: www.investsense.com.au/industry-articles/markets-adjust-as-trump-rhetoric-heats-up-and-central-banks-signal-slower-pace-of-cuts

What we are working on:www.investsense.com.au/industry-articles/balancing-risks-and-opportunities-in-the-post-election-market 

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Financial markets last week were driven by growing evidence of a widening economic divide between the United States and Europe.

In brief:
Diverging Economic Trends Between the U.S. and Europe: The U.S. economy remains strong with robust growth in its services sector, while Europe faces challenges, with declining activity in key countries like Germany and France.

Implications for Monetary Policy and Markets: In Europe, weak data has raised the chances of an interest rate cut by the European Central Bank, while in the U.S., strong economic signals are reducing the likelihood of further Fed rate cuts. Upcoming U.S. inflation data will be crucial in shaping these decisions.

Key Risks and Opportunities: U.S. tariffs could worsen Europe’s economic troubles, but they may also push for closer Eurozone cooperation. Meanwhile, U.S. policymakers remain optimistic, keeping an eye on inflation and holiday spending as signals of economic health.

Get access to the charts:www.investsense.com.au/industry-articles/markets-reflect-diverging-economic-paths-for-u-s-and-europe 

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The past week saw markets digest the mixed signals about the implications of Donald Trump's election victory and early policy moves.

In brief 

Equities and Currency Volatility: U.S. equities surged early in the week, driven by sectors like financials and energy, but the rally faded as markets began reevaluating the "Trump trade." Meanwhile, the U.S. dollar hit a two-year high before pulling back slightly.

Earnings Growth Paradox: Companies with strong international exposure, like Alphabet and Nvidia, are leading U.S. earnings growth. However, Trump's "America First" policies could challenge their success if trade restrictions and tariffs are implemented aggressively.

Central Banks on Alert: Inflation risks are causing Central Banks to rethink their policies. The Fed’s December rate cut odds dropped, while the RBA and other global banks are taking a more cautious approach to easing.

Get access to the charts:  www.investsense.com.au/industry-articles/market-whiplash-how-markets-are-reacting-to-trumps-policy-signals 

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Following last week’s special Market Sense Check, where Jonathan Ramsay and Andrew Hunt discussed the potential global economic impact of the U.S. election results, we’re starting to see how markets are reacting as the dust begins to settle.

In Brief:
Election-Fueled Market Movements: Following Trump’s win, markets initially reacted with optimism, sending U.S. equities, the dollar, and Treasury yields sharply higher. However, the “Trump trade” lost momentum as investors reassessed the potential policy impacts.

Global Currency Shifts: The U.S. dollar’s early gains reversed by week’s end, with the Australian dollar emerging as a strong performer, gaining nearly 1.6%. Other currencies, like the Japanese yen and British pound, also strengthened slightly.

Sector and Regional Reactions: While U.S. small-cap stocks outperformed, European equities remained subdued, highlighting regional concerns about potential tariffs.

Central Bank Cuts: The U.S. Federal Reserve and Bank of England both cut rates by 25 basis points last week. While the Fed indicated no immediate plans for further cuts, the Bank of England emphasised that any future adjustments would proceed cautiously.

Get access to the charts: www.investsense.com.au/industry-articles/trump-trade-unwinds-market-reactions-to-the-u-s-election-outcome 

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Markets remained steady this past week as they await the outcome of the U.S. elections.

Topics Covered:

• U.S Market Economic indicators
• Q3 Tech Earnings 
• Asset class movements from the last week 
• Long-term economic and market themes to watch for the next decade

Get access to the charts: www.investsense.com.au/industry-articles/markets-hold-steady-with-eyes-on-the-us-elections-and-economic-updates

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Last week, markets saw a mix of outcomes, with Europe and Japan experiencing declines, while the UK, U.S, and Australia showed resilience.

Topics Covered:

• Australian Market Resilience 
• Early Q3 Reporting Season
• Asset class movements from the last week 
• Long-term economic and market themes to watch for the next decade

Get access to the charts: www.investsense.com.au/industry-articles/markets-mixed-as-australia-shows-resilience-amid-global-slowdown-signals 


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Last week, markets remained resilient despite several events that could have been expected to have a greater impact.


Topics Covered:

• U.S Market Performance
• A solid start to the financial year in Australia 
• Asset class movements from the last week 
• Long-term economic and market themes to watch for the next decade

Get access to the charts:  www.investsense.com.au/industry-articles/markets-steady-amid-geopolitical-tensions-and-inflation-concerns 


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The past week saw global markets adjust expectations for the pace of interest rate cuts from major central banks, especially the Federal Reserve, following a much stronger than anticipated US jobs report on Friday. However, some of this repricing reversed early this week as disappointing fiscal stimulus measures from China and geopolitical tensions weighed on risk sentiment.

Topics Covered:

• The "Superb" US Jobs Report and its implications in market
• China’s Disappointing Stimulus 
• Asset class movements from the last week 
• Long-term economic and market themes to watch for the next decade

Get access to the charts: www.investsense.com.au/industry-articles/strong-u-s-jobs-report-and-chinas-disappointing-stimulus  


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