The PULSE: Global Economic and Market News for Wednesday, December 4, 2024

On December 4, 2024, global financial markets exhibited resilience and volatility, influenced by political developments, economic forecasts, and corporate performances.

OECD Economic Outlook

The Organisation for Economic Co-operation and Development (OECD) released its latest Economic Outlook, projecting steady global growth of 3.2% in 2024, slightly increasing to 3.3% in 2025 and 2026. However, the OECD cautioned that rising protectionism could impede trade recovery and disrupt supply chains, potentially hindering this growth trajectory. Reuters

Regional Economic Projections

•               United States: Growth is anticipated to decelerate from 2.8% in 2024 to 2.1% by 2026, primarily due to moderated consumer spending. Reuters

•               China: The economy is expected to slow from 4.9% growth in 2024 to 4.4% in 2026, influenced by high consumer savings and a sluggish property sector. Reuters

•               Eurozone: Growth is projected to rise from 0.8% in 2024 to 1.5% in 2026, supported by investment and tight labor markets. Reuters

•               United Kingdom: The economy is forecasted to grow from 0.9% in 2024 to 1.7% in 2025 before dipping to 1.3% in 2026, driven by public spending and income gains. Reuters

•               Japan: Benefiting from economic stimulus, Japan is expected to rebound from a contraction of 0.3% in 2024 to a growth of 1.5% in 2025, moderating to 0.6% in 2026. Reuters

Market Movements

•               United States: Wall Street reached new records, propelled by strong performances in tech and AI sectors. The S&P 500 increased by 0.6%, the Dow Jones Industrial Average rose by 0.7%, and the Nasdaq Composite climbed by 1.3%. Salesforce shares surged 11% following robust quarterly revenue, underscoring advancements in AI. AP News

•               Asia: Political unrest in South Korea, marked by a brief imposition and subsequent lifting of martial law by President Yoon Suk Yeol, led to a 1.4% decline in the KOSPI index. The South Korean won experienced volatility but showed signs of recovery. Reuters

•               Europe: French markets remained calm despite an impending confidence vote on Prime Minister Michel Barnier's 2025 budget, which includes significant cost-saving measures. Reuters

Commodity Markets

•               Oil: Prices remained steady after recent gains driven by geopolitical tensions in the Middle East and anticipated OPEC+ supply cut extensions. Reuters

•               Gold: Prices increased, reflecting investor caution amid global uncertainties.

Central Bank Policies

Investors closely monitor signals from the U.S. Federal Reserve regarding potential interest rate cuts, especially in light of recent labor market data. Treasury yields have shown slight increases, with further labor data pending. Reuters

Global Trade Concerns

The OECD highlighted the risks of rising protectionism, which could disrupt supply chains and negatively impact global growth. The organization emphasized the importance of governments stabilizing debt burdens as inflation eases. Reuters

Conclusion

As 2024 concludes, the global economic landscape is shaped by steady growth projections and emerging risks, including political unrest and protectionist policies. Market participants remain vigilant, balancing optimism in sectors like technology and AI with caution amid geopolitical and economic uncertainties.

Sources:

• OECD Economic Outlook: https://www.reuters.com/markets/oecd-warns-protectionism-risk-global-growth-outlook-2024-12-04

• Global Markets Wrap: https://www.reuters.com/markets/global-markets-wrapup-1-2024-12-04

• Morning Bid: Powell Tees Up: https://www.reuters.com/markets/us/global-markets-view-usa-2024-12-04

• Tech Stocks Drive Wall Street: https://apnews.com/article/d8b662da846c8ae5b32ab3a91e3529f9

‍