Market Closing Results December 4, 2023 | Self Bank Blog

The European stock market is showing positive trends with the IBEX 35 index rising to its highest levels in 5 years. European indices show mixed performance, with the IBEX 35 (+0.50%) continuing to rise thanks to lower bond interest rates.

In the Asia-Pacific region, capital investment is mainly concentrated in China and Japan; however, mainland China's CSI 300 index has fallen to its lowest level in 5 years. At the same time, U.S. bourses, at the close of the European session, declined significantly, especially in the technology and communications sectors.

The market has not yet seen significant changes in anticipation of new macroeconomic and corporate data. Investors, who will pay attention to the release of services PMI and various US labor market data this week, remain cautious following the release of the Sentix investor confidence index in the eurozone, which came in lower than expected.

IBEX 35 consolidates its highest levels since 2018 after five consecutive weeks of gains. Mining companies are experiencing falling oil prices, while the renewable energy sector and interest rate-dependent companies show the highest growth.

The eurozone sovereign debt market has seen little change in yields. Next week, investors will focus on the release of various U.S. labor market data, while European sovereign debt remains stable. At the same time, doubts about the Federal Reserve's monetary policy due to statements by Jerome Powell, the Fed president, who said it was too early to draw conclusions about the sufficiency of current interest rates to control inflation, helped push yields higher. Nevertheless, investors still consider it likely (55% probability) that both the Federal Reserve and the European Central Bank will start cutting interest rates in March 2024 earlier than expected.

Decreased economic activity and limited OPEC+ production cuts are depressing oil prices. The price of oil has declined, with investors continuing to make sense of the voluntary OPEC+ production cuts. Thus, the announcement that the major countries will cut production by about 2.2 million barrels per day through March 2024 seems insufficient to lift the oil price in light of slowing global demand and increased oil production by non-cartel members such as the U.S. and Brazil.

News from Spotify. The streaming music provider has announced plans to cut around 1,500 jobs, representing 17% of its workforce. This is on top of the 200 employees already laid off from the Podcasts division in June and the 600 laid off in January. Founder Daniel Ek does not rule out the possibility of further, but smaller, cuts in 2024 and 2025. The company, which was able to turn a profit in the last quarter thanks to higher prices for its service, still has significant costs that are negatively impacting its performance.

Main macroeconomic indicators of the day:

• German trade balance. The decline in German exports slowed to 0.2% in October, while imports fell 1.2%. The balance amounted to 17.8 billion euros.
• The unemployment rate in Spain. According to the Ministry of Labor and Social Economy, the number of registered unemployed in Spain totaled 2,734,831 in November, the lowest November figure since 2007. Compared to October, the number of registered unemployed fell by 24,573. In addition, average employment remains around 20.8 million in November.
• The Sentix index in the euro area. In December, the Sentix index again showed an improvement in investor confidence in the euro area, reaching -16.8 points. However, the data was less favorable than expected (-15 points).
• U.S. manufacturing orders. In October, new manufacturing orders fell 3.6% from the previous month.