London (AFP) – Major stock markets mostly fell Tuesday as attention turned to the Federal Reserve’s upcoming policy decision, with traders hoping for guidance on its interest rate plans as president-elect Donald Trump prepares to take office. Wall Street’s major indices fell at the opening bell, having ended the previous day mostly higher, with Asia unable to pick up the baton Tuesday.
In one of the last data releases ahead of the Fed’s rate decision, November US retail sales rose by 0.7 percent, beating analyst expectations; however, excluding auto sales, they were up only 0.2 percent. “The key takeaway from the report is in the ex-auto number, which was up modestly and a reflection of some softening spending activity given that it is not adjusted for price changes,” said Briefing.com analyst Patrick O’Hare. Investors were also reacting to a rise in Treasury rates, he added. The Fed is expected to lower borrowing costs on Wednesday for the third meeting in a row as it looks to guide the world’s top economy to a soft landing. However, its statement will be pored over for clues about next year’s outlook, and investors have already started paring their bets on how many times the Fed will cut over the next 12 months due to still-sticky inflation, a strong labor market, and uncertainty about Trump, who has pledged to slash taxes and impose tariffs on imports.
The Canadian dollar fell to the lowest level against the US dollar since April 2020 after Canada’s Deputy Prime Minister Chrystia Freeland quit Monday in a surprise move, saying she disagrees with Justin Trudeau over US president-elect Donald Trump’s tariff threats. The resignation of Freeland, who also stepped down as finance minister, marked the first open dissent against Prime Minister Trudeau from within his cabinet and may threaten his hold on power. In her letter, Freeland emphasized that the country needed to take Trump’s tariff threats “extremely seriously.” Warning that it could lead to a “tariff war” with the United States, she said Ottawa must keep its “fiscal powder dry.” Trudeau flew to Florida last month to dine with Trump at the latter’s Mar-a-Lago resort and try to head off the tariff threat, but nothing yet indicates the US president-elect is changing his position.
Investors are also keeping tabs on Beijing after Chinese leaders’ latest measures to kickstart the economy fell short of expectations, with weak retail sales data on Monday reinforcing the need for more support. In European equities trading, London slid in afternoon deals as official data showing a jump in UK wages growth cemented forecasts that the Bank of England will avoid cutting interest rates this week. Paris edged higher, but Frankfurt dipped as sentiment was hit by news that German business confidence this month hit the lowest level since the start of the coronavirus pandemic. Bitcoin traded close to a record high of almost $107,791 reached Monday on continued optimism that Trump will introduce measures to deregulate the cryptocurrency market. Oil prices retreated, hit by concerns that China’s struggling economy will impact demand for crude.
**Key figures around 1430 GMT:**
New York – Dow: DOWN 0.5 percent at 43,495.92 points
New York – S&P 500: DOWN 0.5 percent at 6,043.09
New York – Nasdaq Composite: DOWN 0.5 percent at 20,078.31
London – FTSE 100: DOWN 0.7 percent at 8,208.25
Paris – CAC 40: UP less than 0.1 percent at 7,360.29
Frankfurt – DAX: DOWN 0.1 percent at 20,287.68
Tokyo – Nikkei 225: DOWN 0.2 percent at 39,364.68 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 19,700.48 (close)
Shanghai – Composite: DOWN 0.7 percent at 3,361.49 (close)
Euro/dollar: DOWN at $1.0506 from $1.0509 Monday
Pound/dollar: UP at $1.2695 from $1.2678
Dollar/yen: DOWN at 153.63 yen from 154.13 yen
Euro/pound: DOWN at 82.77 pence from 82.86 pence
West Texas Intermediate: DOWN 1.2 percent at $69.87 per barrel
Brent North Sea Crude: DOWN 1.1 percent at $73.10 per barrel.
© 2024 AFP
