Global stock markets displayed varied performances on Thursday as the U.S. market observed a National Day of Mourning for former President Jimmy Carter, resulting in its closure.
In the UK, the FTSE 100 saw an increase of 0.8%, reaching 8,319.69. This uptick came amid a decline in the British pound against the U.S. dollar, fueled by concerns regarding the economic outlook and fiscal stability of the UK. A weaker pound typically enhances the profitability of U.K. exporters, positively influencing their stock values.
On the continental stage, Germany’s DAX experienced a slight drop of 0.1% to close at 20,317.10, whereas France’s CAC 40 gained 0.5%, finishing at 7,490.28.
Asian markets largely faced downturns as apprehension grew surrounding potential escalations in trade tensions with the impending inauguration of President-elect Donald Trump. In Tokyo, shares fell as reports indicated significant wage growth in November, which may lead to tighter monetary policy from the central bank. The Nikkei 225 index declined by 0.9% to close at 39,605.09.
Meanwhile, the Hang Seng index in Hong Kong edged down 0.2% to 19,240.89, and the Shanghai Composite index fell by 0.6% to 3,211.39. The Consumer Price Index (CPI) in China indicated a modest rise of 0.1% year-on-year in December; however, producer prices saw a more substantial decline of 2.3%, pointing to subdued demand within the world’s second-largest economy.
In Australia, the S&P/ASX 200 saw a minor decrease of 0.2% to 8,329.20, while South Korea’s Kospi managed a slight increase of less than 0.1% to 2,521.90, supported by strong performance from technology and automotive sectors. Conversely, Taiwan’s Taiex experienced a sharper drop of 1.4%, and India’s Sensex fell by 0.7%. In Bangkok, the SET index slipped by 1.8%.
Commenting on the market climate, Stephen Innes of SPI Asset Management noted, “Investors are grappling with the unpredictable trading environment prompted by Trump’s presidency, where initial enthusiasm over potential tax cuts is now clouded by escalating concerns regarding proposed tariffs and unusual geopolitical ambitions, such as the acquisition of Greenland or increased control over the Panama Canal.”
In the U.S., the bond market remained operational until its suggested closure at 2 p.m. Eastern Time. Yield rates remained relatively stable following a recent spike that unsettled the stock market. The yield on the 10-year Treasury bond sat at 4.69%, slightly down from its recent peak of over 4.70% the previous day, which marked its highest point since April, having been below 3.65% in September.
Higher yields create challenges for stocks by increasing borrowing costs for both businesses and families, as well as diverting investors towards bonds, reducing interest in equities. The rise in yields has accompanied reports indicating stronger-than-expected economic performance in the U.S. Additionally, concerns about inflationary pressures from Trump’s favored policies concerning tariffs and taxes have contributed to this upward trend in yields.
A key event for the U.S. financial markets is anticipated on Friday when the Labor Department will publish its monthly report on the job market. Investors hope the report will reflect sufficient strength to alleviate recession fears while still allowing the Federal Reserve to proceed with interest rate cuts.
In the energy sector, U.S. benchmark crude oil prices increased by 0.8%, concluding at $73.92 per barrel, while Brent crude, the international benchmark, rose by 1% to settle at $76.92 per barrel.
