Global stock markets mixed as Wall Street ends first week of 2024 down

Investors sceptical that the Fed might not end interest rate policy, even though inflation has cooled

Traders at work on the New York Stock Exchange floor. Major global stock markets ended 2023 with mixed results, but Wall Street posted its best annual rise since 2019. AP

Global stock markets were mixed at the end of the first trading week of 2024, with Wall Street carving out a gain yesterday that was not enough to prevent its first weekly loss in 10 weeks despite strong US jobs data.

Employers in the world's biggest economy added 216,000 jobs in December, up from 199,000 in November, with the unemployment rate unchanged at 3.7 per cent, the Labour Department reported on Friday.

The data prompted Treasury Secretary Janet Yellen to declare that the country has achieved a soft landing – or bringing down inflation without plunging the economy into recession – after recent jobs data showed continued economic strength in the face of high interest rates.

However, investors remain wary that the Federal Reserve might not be convinced enough to begin easing off on its rate rises throughout 2024, even with inflation cooling down in the US.

The US central bank said it had made “clear progress” in bringing down inflation towards its 2 per cent goal, but officials were less certain on when it may start cutting interest rates, minutes released from their December 12-13 meeting on Wednesday showed.

Major global stock markets ended 2023 trading with mixed results, but Wall Street posted its best annual rise since 2019, entering the new year against the backdrop of economic and political uncertainty.

“Buying stocks with price expectations based on the assumption that the Federal Reserve will cut interest rates by 150 basis points in the next year, alongside strong final demand and company profits, does not seem easy or logical,” said Rania Gule, a market analyst at XS.com.

On Wall Street, the S&P 500 rose 0.2 per cent, while the Dow Jones Industrial Average and Nasdaq Composite both inched up 0.1 per cent – dragging them down 1.5 per cent, 0.6 per cent and 3.2 per cent, respectively for the week.

The benchmark S&P 500 settled more than 24 per cent higher in 2023, thanks to a stellar run in megacap technology stocks. It was also just a little short of its record closing high it recorded on January 3, 2022.

The Dow rose 13.7 per cent, and the tech-heavy Nasdaq surged 13.7 per cent and 43.4 per cent, respectively, last year.

Shares in technology giant Apple declined 0.4 per cent on Friday, taking its weekly loss to nearly 6 per cent, the iPhone-maker's worst since September. The California-based company's stock surged by more than 48 per cent in 2023.

In Europe, London's FTSE 100 settled down 0.4 per cent, driving its weekly loss to 0.6 per cent to snap a six-week winning streak, as the market curbed expectations of aggressive monetary policy after the government reported economic data that was better than anticipated.

Paris's CAC 40 gave up 0.4 per cent, and Frankfurt's DAX shed 0.1 per cent.

In Asia, major bourses were mixed. Hong Kong's Hang Seng index declined 0.7 per cent, while the Shanghai Composite retreated 0.9 per cent.

Tokyo's Nikkei 225 ended up 0.3 per cent. The yen posted its worst weekly decline against the dollar in 16 months, on expectations the Bank of Japan will ease up on its monetary policy as it assesses the economic damage stemming from a 7.6-magnitude earthquake that hit the Japan on New Year's Day.

In commodities, oil prices settled higher at the end of the first trading week of 2024 as supply concerns continue to rise on mounting tension in the Middle East and a disruption in production in Opec member Libya.

Brent rose 1.51 per cent to close at $78.76 a barrel, while West Texas Intermediate surged 2.24 per cent to settle at $73.81 a barrel.

Gold, meanwhile, barely budged after an up-and-down session, but posted its first weekly drop in four as the dollar rose. The precious metal was virtually flat and settled at $2,049.80 an ounce.