Global equities mixed; US and Japan advance
Overall, global equities had mixed performance with Japan and US leading while emerging markets and UK equities were the major lagers. US equities rallied, following poor performance back in October, gaining 3.7 percent as measured by the S&P 500, as a result of Trump’s victory, which is expected to lead to tax cuts and infrastructure spending. Commodities were mixed for the month with Gold down 8.1 percent while Brent Oil is up 4.5 percent. OPEC’s decision in its meeting on November 30 in Vienna, to cut production levels for the first time in eight years, has driven crude oil prices up by 8.8 percent in the last day of trading of the month. imports, which has fallen faster than exports. The Nikkei Manufacturing PMI remains slightly above 50 at 51.3 compared to 51.4 in the previous month. Japan’s CPI rose YoY 0.1 percent in October breaking the declining trend over the past seven months. The unemployment rate remains at 3 percent in October, unchanged from September, the lowest since 1995; however, Real GDP grew at a rate of 0.5 percent QoQ in Q3.
Japanese equities continue to perform considerably well, as measured by the Nikkei 225, generating returns of 5.1 percent in November.
Chinese exports dropped 7.3 percent in October, an improvement from the 10 percent decline in September and imports declined by 1.4 percent YoY. CPI increased, on a YoY basis, from 1.9 percent in September to 2.1 percent in October. The Caixin Manufacturing PMI dropped to 50.9 in November compared to 51.2 in October.
Although emerging market equities ended the month down 4.7 percent, Chinese equities, as measured by the Shanghai Stock Exchange Composite Index, generated returns of 4.8 percent.
The GCC equity market continued to perform well ending the month of November with gains of 7.8 percent, supported by Saudi equity market, which increased 16.4 percent. In addition, UAE equities, Dubai and Abu Dhabi, recovered from last month posting minor gains of 0.9 percent and 0.2 percent, respectively. The gains in Saudi stocks were supported by delayed payments finally being made to contractors amounting to SR40 billion and the announcement that another SR100 billion will be paid out by the end of December. Abu Dhabi’s improved performance this month comes from speculation of future mergers within the financial industry given the recent completed merger between First Gulf Bank and National Bank of Abu Dhabi.