For those who have missed the market action last week, most stock markets finished the week in the red as geopolitical tensions in the Middle East continued to weigh on investor sentiment. The UK’s FTSE 100 dropped -0.2% while pan-European Stoxx 600 and Germany’s Dax 100 slipped -0.2% and -0.1%, respectively.
Over in the US, the S&P 500 and tech-heavy Nasdaq added +0.5% and +0.9%, respectively, following positive quarterly earnings reports from Amazon, Alphabet (owner of Google), Meta (owner of Facebook) and Microsoft. However, concerns about rising expenses offset some stock gain.
In Asia, Japan’s Nikkei 225 lost -2.4%, due in part to rising bond yields. The Bank of Japan’s ten-year government bond rose to a ten-year high of 0.87%, moving closer to the central bank’s upper limit of 1%. China’s Shanghai Composite ended the week unchanged after improved industrial profit figures suggested the economy is stabilising. Hong Kong’s Hang Seng dropped -1.8% in a shortened trading week.
The 10-year US Treasury yield continued its roller-coaster ride as a wide range of factors contributed to big swings in this key data point. A report that the U.S. economy achieved a higher rate of growth in the third quarter that surprised almost everyone. The yield on the 10-year Treasury jumped to 5% while the 30-year Treasury rose to a high of 5.15% in just under two months.
Elsewhere, the conflict between Israel and Hamas has led to increased volatility for several commodities, including oil and gold. Both have rallied for more than +5%. Bitcoin rallied with the cryptocurrency briefly touching USD35,000. The forex market succeeded in pushing the greenback to new highs for the year near JPY150.80.
Before I close my laptop, a heads up… the next wave of our product expansion is going to kick off.