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U.S. Stock Futures Rise as Investors Weigh Tariff and Recession Risks

U.S. Stock Futures Rise as Investors Weigh Tariff and Recession Risks

U.S. markets kick off the week with heightened volatility,
as investors await key economic and trade developments that could shape market trends

Topic

Market Volatility

Economic Indicators

Market Volatility

U.S. stock futures rose as investors sought to gauge the market’s ability to extend its recent gains in a new trading week,
amid ongoing concerns about tariffs and a potential economic recession.

Dow Jones Industrial Average futures climbed by about 177 points, or 0.4%. S&P 500 futures also rose by a similar percentage,
while Nasdaq 100 futures gained 0.5%.

This improvement followed a positive week for U.S. stocks, where indices managed to post gains despite volatility.
The S&P 500 avoided weekly losses for the fifth consecutive week.
On Friday, the index rose 0.08% to close at 5,667.56 points, while the Nasdaq advanced 0.52% to 17,784.05 points,
and the Dow Jones added 32 points to reach 41,985.35 points.

Economic Indicators

Over the week, the S&P 500 gained 0.5%, the Nasdaq added 0.2%, and the Dow Jones climbed 1.2%.
These movements coincided with what’s known as the “quadruple witching” — the expiration of several types of derivative contracts,
with Goldman Sachs estimating the notional value of these contracts to exceed $4.7 trillion.

Despite these gains, fears of an economic slowdown remain,
especially with the approaching implementation date of new tariffs announced by President Donald Trump,
which are expected to take effect on April 2 for countries that impose duties on U.S. imports.

Trump’s recent comments about showing potential “flexibility” on tariffs helped ease some concerns,
and Federal Reserve Chairman Jerome Powell offered reassuring remarks,
indicating that the negative effects of trade policies would likely be short-term.

This week, investors await key economic data, including the Consumer Confidence Index reading on Tuesday and weekly jobless claims on Thursday,
while closely monitoring developments in U.S. trade policy and economic growth prospects.

U.S. Stock Futures Rise as Investors Weigh Tariff and Recession Risks

US Stock Indices Close November with Exceptional Performance

US Stock Indices Close November with Exceptional Performance: November ended with remarkable performance in US financial markets,
as the “S&P 500” recorded its strongest monthly gain this year.

This was accompanied by shifts in bond yields and the dollar,
driven by speculation about potential policy changes post-elections.

This report explores the impact of US economic policies and the global markets’ response,
including Europe, Canada, and Japan.

Content

Notable US Performance

Most robust Monthly

Global Performance of Stocks and Currencies

November Performance Summary

Notable US Performance

US stock indices ended the short trading session on Friday higher,
while Treasury yields fell across all maturities.
This was attributed to expectations that President-elect
Donald Trump might adopt less stringent trade policies,
leading to the dollar’s most significant weekly loss in three months.

The “S&P 500” index rose by more than 1%
for the second consecutive week and climbed 0.6% on Friday to reach new record levels.
Meanwhile, the 10-year Treasury yield declined to 4.17%,
and the Bloomberg Dollar Spot Index continued its
weekly decline by over 1% after an eight-week winning streak.

Trump’s selection of a Treasury Secretary nominee
boosted optimism that tariffs would be more measured.
This would support the performance of US stocks and bonds while weakening the dollar.

Most robust Monthly Performance for “S&P 500”

The S&P 500 rose 5.7% in November,
marking its best monthly performance of the year.
According to EPFR Global data,
investors poured approximately $141 billion into
US stocks during the month had the largest four-week inflow on record.

This performance was driven by a small group
of major technology stocks amid expectations of the
Federal Reserve lowering interest rates while the US economy grows.

Max Kettner, Chief Multi-Asset Strategist at “HSBC Holdings,”
stated in an interview with Bloomberg Television:
“What matters now is that the Federal Reserve is shifting its policy,
leading to lower real interest rates and higher stocks. The current conditions are ideal.”

Global Performance of Stocks and Currencies

Canada and Europe:

In Canada, the economy recorded modest growth last month,
increasing the likelihood of the central bank continuing to cut interest rates.
In Europe, fiscal spending appears to be improving,
with expectations that any potential ceasefire
in Ukraine could ease the pressure from rising energy prices.

Eurozone:
Inflation rose above the European Central Bank’s 2% target,
but only slightly, which is unlikely to alter the course of monetary policy.

Japan:
The yen briefly dropped below the 150 level against
the dollar after the Bank of Japan Governor
Kazuo Ueda stated that further currency weakening poses significant risks.
Earlier, the yen had rebounded above this level following
Tokyo inflation data showing higher-than-expected price increases,
raising bets on a potential interest rate hike at the Bank of Japan’s upcoming meeting.

November Performance Summary

The performance of US markets in November highlights the
relative strength of the US economy compared to the rest of the world,
supported by expectations of interest rate cuts
and substantial inflows into stocks.
As global market developments continue,
the future of monetary policies remains a critical factor in shaping market directions.

US Stock Indices Close November with Exceptional Performance

The Japanese Yen Above 150 Yen Barrier for the First Time in 5 Months

The Japanese Yen Above 150 Yen Barrier for the First Time in 5 Months: The Japanese yen rose widely in the Asian market on Thursday
against a basket of major and minor currencies, extending its gains for the third consecutive day against the US dollar.

Contents

The Japanese Yen

US Stocks

Bank of England

The Awakening Continues: The Japanese Yen Above 150 Yen Barrier for the First Time in 5 Months

The Japanese yen rose widely in the Asian market on Thursday against a basket of major and minor currencies,
extending its gains for the third consecutive day against the US dollar.
It traded above the psychological barrier of 150 yen per dollar for the first time in five months,
thanks to more aggressive than expected results from the Bank of Japan’s monetary policy meeting.

The Bank of Japan raised Japanese interest rates for the second time this year to the highest range since 2008,
announced a quantitative tightening plan, and halved government bond purchases over two years.
Governor Kazuo Ueda stated that the benchmark interest rate has no specific ceiling during the current normalization cycle.

US Stocks Close the Last Sessions of July with a Rise, and the Dow Jones Achieves Monthly Gains

US stock indices rose during Wednesday’s trading
amid the assessment of corporate earnings results and the Federal Reserve statement.

The Federal Reserve announced on Wednesday that it will keep
the interest rate unchanged for the fifth time this year and the eighth time in a row,
at a range between 5.25% and 5.50%, a move largely in line with expectations.

This marks the ninth time the Fed has held the interest rate steady since March 2022,
when the monetary tightening cycle began.

The Dow Jones Industrial Average rose by 0.2% (equivalent to 99 points) to 40,842 points,
achieving monthly gains of 4.4%.
The highest level was 41,198 points, and the lowest was 40,655 points.

Bank of England Poised to Lower Interest Rates

The Bank of England is set to start lowering the base interest rate by 25 basis points to 5%, down from its 16-year high of 5.25%.
However, the decision is highly challenging,
Many investors believe the central bank might opt to keep rates steady due to inflation concerns.
Headline inflation remained constant at 2% in June, while the unemployment rate remained at its highest level since 2021.
Meanwhile, wage growth, despite slowing, remains high.
The Bank of England will unveil new growth and inflation forecasts.

The Japanese Yen Above 150 Yen Barrier for the First Time in 5 Months