Global Markets Experience a Mixed Bag
Asian Stocks Take a Hit
Asian stocks plummeted on Monday, following a record-breaking day for U.S. stocks, as China’s highly anticipated stimulus package failed to meet investor expectations. The package, approved on Friday, amounts to 6 trillion yuan ($839 billion) and aims to help local governments refinance their debt, boosting growth in the world’s second-largest economy.
Stimulus Package Falls Short
However, experts believe the stimulus is more focused on plugging holes in a struggling local government system rather than jump-starting economic growth. “It’s not exactly the growth rocket many had hoped for,” said Stephen Innes of SPI Asset Management. “While it’s a substantial number, the stimulus is less about revving up growth and more about addressing local government debt issues.”
Inflation Rate Slows Down
Meanwhile, China’s inflation rate in October rose 0.3% year-on-year, marking a slowdown from September’s 0.4% increase and dropping to its lowest level in four months, according to the National Bureau of Statistics.
Stock Market Performance
The Hang Seng fell 1.4% to 20,439.99, while the Shanghai Composite picked up a bit, gaining 0.2% to 3,461.41. Japan’s benchmark Nikkei 225 edged less than 0.1% to 39,533.32. Australia’s S&P/ASX 200 dipped 0.4% to 8,266.20, and South Korea’s Kospi fell 1.1% to 2,532.62.
U.S. Futures and Oil Prices
U.S. futures were higher, while oil prices declined. On Friday, the S&P 500 rose 0.4% to 5,995.54, its biggest weekly gain since early November 2023 and briefly crossed above the 6,000 level for the first time.
Bond Market Update
In the bond market, longer-term Treasury yields eased. The yield on the 10-year Treasury slipped to 4.30% Friday from 4.33% late Thursday. However, it remains well above where it was in mid-September, when it was close to 3.60%.
Federal Reserve and Interest Rates
The hope is that the U.S. economy can continue to stay solid as the Federal Reserve continues to cut interest rates to keep the job market humming, now that it’s helped get inflation nearly down to its 2% target. However, some of the rise in yields has also been attributed to President-elect Donald Trump’s policies, which economists say could drive inflation and the U.S. government’s debt higher, along with the economy’s growth.
Currency and Commodity Updates
In other dealings Monday, U.S. benchmark crude oil lost 4 cents to $70.34 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, gave up 7 cents, to $73.94 per barrel. The dollar rose to 153.47 Japanese yen from 152.62 yen, while the euro edged down to $1.0720 from $1.0723.
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