The PULSE: Global Economic and Market Summary – November 15, 2024

U.S. Stock Markets Drop Amid Sector Turmoil

U.S. stock indices experienced a broad selloff, with all three major indexes posting losses. The S&P 500 fell by 1.4%, dragged down by steep declines in the healthcare and technology sectors. The Dow Jones Industrial Average dropped 0.7%, and the Nasdaq Composite saw a sharp 2.4% decline. Healthcare stocks were under significant pressure following news that President-elect Donald Trump is considering appointing vaccine critic Robert F. Kennedy Jr. as Secretary of Health and Human Services. Moderna and Pfizer shares fell 6.2% and 4.8%, respectively, in response to the announcement.

Tech stocks also faced headwinds, with semiconductor companies declining due to concerns over U.S.-China trade policies. Nvidia and AMD dropped over 3%, reflecting investor unease about potential export restrictions to China.

Gold Dips Amid Rising Treasury Yields

Gold prices slipped slightly, with the SPDR Gold Shares ETF (GLD) closing at $236.71, down 0.13%. A stronger U.S. dollar and rising Treasury yields reduced demand for the metal as a safe-haven investment. Investors are closely watching Federal Reserve signals for guidance on monetary policy, as higher yields make non-yielding assets like gold less attractive.

Eurozone Under Pressure: Euro Nears Parity

The euro continued its decline against the U.S. dollar, reaching its lowest level since mid-2022. Now hovering near $1.05, the euro is under pressure due to fears of U.S. tariffs targeting European goods and economic stagnation within the Eurozone. Concerns over declining industrial output in Germany and sluggish growth in France have further weakened the region's financial outlook. Analysts predict the euro could soon reach parity with the dollar, a level not seen in over two years, raising questions about the Eurozone's export competitiveness and overall stability.

Oil Prices Extend Losses

Oil prices fell for the third consecutive day, with Brent crude dropping 1.5% to $74.25 per barrel and West Texas Intermediate (WTI) down 1.7% to $69.80. The slump was driven by expectations of a global supply surplus in 2025, a strong dollar, and tepid demand from China. The International Energy Agency (IEA) projects that oil supply will exceed demand by 1 million barrels per day next year, further pressuring prices. Energy companies in the S&P 500 also reflected the downturn, with ExxonMobil and Chevron both declining over 1%.

Cryptocurrency Resilience Amid Broader Declines

Cryptocurrencies bucked the overall market trend, with Bitcoin stabilizing above $90,000. Optimism about potential regulatory clarity under Trump's administration has fueled the digital asset rally, attracting investors even as equities waver. Ethereum also posted modest gains, rising 1.2% on the day.

Bank of England Stresses EU Trade Relations

In the UK, Bank of England Governor Andrew Bailey reiterated the importance of maintaining strong trade ties with the European Union amid rising global economic fragmentation. Speaking at a financial summit in London, Bailey highlighted the risks of post-Brexit economic isolation, urging policymakers to prioritize open trade to support growth. The pound remained steady against the dollar at $1.21, reflecting mixed investor sentiment.

Investor Sentiment Reflects Global Uncertainty

Global investors are navigating a landscape marked by uncertainty. President-elect Trump's proposed economic policies, including potential tariffs and tax reforms, are causing unease in international markets. Emerging economies, particularly in Asia and Latin America, have seen increased outflows as investors reassess risk. However, some sectors, such as European automakers and emerging-market currencies like the Mexican peso, are viewed as undervalued opportunities for long-term gains.

Closing Thoughts

The financial landscape on November 15 reflected a mix of caution and volatility as global markets grappled with geopolitical developments, shifting monetary policies, and fluctuating investor sentiment. While sectors like cryptocurrency showed resilience, broader equity markets and commodities like oil and gold remained under pressure, underscoring the complexities of navigating today's interconnected global economy.

Sources:

•           Reuters: https://www.reuters.com/business/take-five/global-markets-themes-graphic-2024-11-15/

•           AP News: https://apnews.com/article/6040f0d5d509906da53dc41219a17e78

•           MarketWatch: https://www.marketwatch.com/story/oil-prices-head-for-weekly-fall-on-surging-u-s-dollar-soft-china-demand-ef457b87

•           Investors: https://www.investors.com/market-trend/stock-market-today/stock-market-today-nasdaq-sp500-dow-jones-disney-stock/

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