The PULSE: Global economic news and market status as of November 11, 2024.

Global Economic Overview

The global economy is expected to grow at a steady pace of 3% in 2025. This outlook is supported by recent interest rate cuts by major central banks, especially in the U.S. and Europe, to sustain economic momentum and address cooling inflationary pressures. The projected growth reflects optimism about U.S. economic resilience, improved consumer spending, and recovery in emerging markets. However, some analysts note that high household debt and geopolitical tensions, particularly between the U.S. and China, could introduce downside risks (Source: Reuters, "Global economy set to cruise at a solid 3% growth rate next year, Reuters poll finds," October 31, 2024).

China’s Economy

In response to ongoing economic challenges, especially in the real estate sector and local government debt, China is considering a massive fiscal stimulus that could involve issuing over $1.4 trillion in additional government debt over the coming years. This plan seeks to support domestic growth and mitigate the economic impacts of a slowing property market. Additionally, analysts believe this move is also strategic, positioning China to compete globally in light of the U.S. election outcome and international market uncertainties (Source: Reuters, "Eyeing US election, China considers over $1.4 trillion in extra debt over next few years, say sources," October 29, 2024).

The Federal Reserve

The Federal Reserve implemented its second rate cut of the year, lowering the federal funds rate by 0.25 percentage points to support the economy amid cooling inflation rates. This marks a shift from the Fed’s aggressive rate hikes over the past two years, with the current move aimed at encouraging spending and investment. The Fed’s decision underscores its cautious stance, balancing the need for economic growth with concerns about potential inflationary rebounds (Source: CBS News, "Fed implements second rate cut of the year amid easing inflation," October 31, 2024).

European Economy

The European Union has announced a new initiative focused on strengthening the bloc's competitiveness through completing the single market and further integrating capital markets by 2027. This ambitious plan aims to enhance the EU's global economic positioning amid pressures from rising energy prices and ongoing structural challenges within member states. European leaders have expressed that this plan is essential to address long-standing gaps in economic integration and capitalize on growth opportunities in technology and green industries (Source: Reuters, "EU leaders set deadlines for bloc's competitiveness push," October 24, 2024).

Inflation

Inflation in the United States has been declining, with the annual inflation rate falling to 2.1% in September, marking the lowest level since early 2021. This decrease results from the Federal Reserve’s previous interest rate hikes and reflects lower energy prices and stabilization in supply chain costs. The drop in inflation has led the Fed and other central banks to reconsider their monetary tightening strategies, with more interest rate adjustments expected to support economic growth (Source: U.S. News, "Annual inflation dips to 2.1% in the final report before the election," October 31, 2024).

Mortgage Rates

Mortgage rates have experienced considerable volatility. The average 30-year fixed-rate mortgage recently increased to 6.92%, highlighting ongoing pressure in the housing market. Although the Fed has cut rates to support economic activity, mortgage rates remain high due to broader market dynamics, including demand for housing, inflationary pressures, and market expectations of future interest rates (Source: MarketWatch, "Why mortgage rates are back up to nearly 7%," October 29, 2024).

Stock Markets

The U.S. stock market surged to record highs in response to the recent presidential election. The Dow Jones Industrial Average jumped 1,508 points to 43,729.93, while the Nasdaq Composite rose by 544 points, ending at 18,983.47. This post-election rally is attributed to investor optimism regarding potential economic policies and relief that uncertainty around the election outcome has subsided. Analysts also suggest that the recent Fed rate cut has bolstered investor sentiment by potentially easing borrowing costs for corporations (Source: ABC News, "U.S. stocks soar following the presidential election," November 11, 2024).

Cryptocurrency

Bitcoin has reached new record levels, with prices surpassing $82,000 amid solid investor demand. The cryptocurrency market has been influenced by various factors, including a perceived safe-haven appeal, ongoing technological advancements in blockchain, and increased institutional investments. This recent surge reflects heightened enthusiasm for cryptocurrencies as an alternative asset class and a potential hedge against inflation and fiat currency volatility (Source: Wall Street Journal, "Bitcoin jumps to a new record, topping $82,000," November 11, 2024).

Sources for today's news, November 11, 2024:

1.     "Global economy set to cruise at a solid 3% growth rate next year, Reuters poll finds," Reuters, October 31, 2024. https://www.reuters.com/markets/global-market-data/global-economy-set-cruise-solid-3-growth-rate-next-year-2024-10-31/

2.     "Eyeing US election, China considers over $1.4 trillion in extra debt over next few years, say sources," Reuters, October 29, 2024. https://www.reuters.com/world/china/eyeing-us-election-china-considers-over-14-trillion-extra-debt-over-next-few-2024-10-29/

3.     "Fed implements second rate cut of the year amid easing inflation," CBS News, October 31, 2024. https://www.cbsnews.com/news/fed-meeting-rate-cut-2024-interest-rate-decision/

4.     "EU leaders set deadlines for bloc's competitiveness push," Reuters, October 24, 2024. https://www.reuters.com/world/europe/eu-leaders-set-deadlines-blocs-competitiveness-push-2024-10-24/

5.     "Annual inflation dips to 2.1% in final report before election," U.S. News, October 31, 2024. https://www.usnews.com/news/economy/articles/2024-10-31/annual-inflation-dips-to-2-1-in-final-report-before-election

6.     "Why mortgage rates are back up to nearly 7%," MarketWatch, October 29, 2024. https://www.marketwatch.com/story/why-mortgage-rates-are-back-to-nearly-7-bf5a183c

7.     "U.S. stocks soar following presidential election," ABC News, November 11, 2024. https://abcnews.go.com/Business/wireStory/stocks-bitcoin-jump-after-trumps-victory-worries-inflation-115543836

8.     "Bitcoin jumps to new record, topping $82,000," Wall Street Journal, November 11, 2024. https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-live-11-11-2024?mod=cybersecurity_whatsnews_pos2

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