Global stock markets showed little movement on November 13 as concerns about inflation and interest rates resurfaced. After two weeks of positive trends, MSCI’s global equities index remained flat, with the S&P 500 losing 0.27%, the Dow Jones staying mostly unchanged, and the Nasdaq Composite sliding 0.4%.
Despite a nearly 5% gain in the MSCI index this month, uncertainty loomed as investors focused on upcoming US economic data, particularly consumer inflation and retail sales figures on November 14 and 15. Barclays strategists warned of potential further rate hikes by the Federal Reserve, emphasizing the persistence of inflation.
Economists anticipated a slowdown in headline consumer price inflation in the US to 3.3% in October, although core inflation, excluding volatile components, was expected to remain unchanged. Research house BCA expressed caution, highlighting the potential impact of geopolitical and financial market risks on bearish equity sentiment.
The combination of rate hike concerns and risk aversion contributed to the US dollar reaching a one-year high against the yen on November 13. Benchmark 10-year Treasury yields also touched a one-week high, reflecting reduced interest in fixed interest-paying debt instruments due to inflation worries.
Nomura Securities strategist Naka Matsuzawa suggested that global equities might be nearing a peak, noting that the market’s positive response to bad economic news as a reason to pause Fed rate hikes might be losing momentum.
In addition to these factors, the meeting between US President Joe Biden and Chinese leader Xi Jinping during an Asia-Pacific Economic Cooperation summit added to short-term market tensions. Crude oil prices dipped on demand concerns, despite OPEC+ support for oil cuts voiced by Iraq.
Brent crude futures for January and US West Texas Intermediate (WTI) crude futures for December saw a slight increase, but market uncertainties persisted amidst global economic variables and geopolitical developments.