Last Week at a Glance

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Global equities and fixed income declined last week as robust US economic data and a hawkish Fed led to a rise in bond yields.

  • US October headline and core CPI were in line with consensus expectations at 2.6% YOY and 3.3% YOY, respectively. However, US retail sales for the month rose more than expected to 2.8% YOY, while September data was also revised higher, indicating continued consumer strength.
  • Amid still resilient US economic data, Fed Chair Powell signaled the Fed was not in a rush to cut rates. As a result, futures pricing now suggest only a 50% chance that the Fed will cut rates at the next December policy meeting and expect only three rate cuts in 2025. In response, ten-year US treasury yields rose 15 bps over the week to 4.45%.
  • The rise in yields weighed on equity and fixed income markets over the week. Rates-sensitive segments such as US small caps (-3.0%) were hit harder. Global semiconductor stocks (-5.6%) also sold off as weaker revenue guidance from Applied Materials raised concerns over chips demand.
  • Emerging markets equities underperformed developed markets last week, driven by weakness in China (-5.9%). Economic data from China remains mixed. October retail sales surprised to the upside, but industrial output missed expectations and housing market data continued to weaken, albeit at a slower pace.
  • The US dollar broadly strengthened against other major developed markets currencies over the week. A stronger dollar and higher yields placed pressure on gold, which declined 4.2% last week.

Sources: Bloomberg Index Services Limited, MSCI Inc., and Thomson Reuters Datastream. MSCI data provided “as is” without any express or implied warranties.
Notes: This edition was prepared on November 17, 2024, and it reviews developments of the prior week. The equity data are total returns net of dividend taxes of MSCI indexes in local currency. Global natural resources equities are represented by the MSCI All Country World Commodity Producers Index. The fixed income data are total returns for Bloomberg indexes. Gold Bullion uses near-month gold futures contracts, as traded on the COMEX, to determine performance. Currency performance is based on Reuters data.