Global stock markets were set to achieve their third consecutive week of gains and a seventh straight month of advancement, bolstered by strong earnings reports from major companies like Amazon and Apple. These results helped alleviate concerns over high valuations in the current market landscape.
Amazon’s stock surged more than 10% after revealing that its cloud revenue grew at the fastest rate in nearly three years, enabling the company to forecast quarterly sales that exceeded analysts’ estimates. In contrast, Apple shares dipped 0.3% to $270.52 despite reaching an intraday high of $277.32 following the announcement of its quarterly earnings. Apple’s robust forecast for the holiday quarter, buoyed by heightened demand for its iPhone 17 models, surpassed Wall Street expectations.
The week encapsulated a flurry of earnings reports from various companies within the “Magnificent Seven,” a group known for its significant market influence. These results underscored the ongoing expansion of infrastructure related to artificial intelligence and a persistent need for cloud computing capacity. Jake Seltz, a portfolio manager at Allspring, noted, “The AI narrative is alive and well… we’ve seen capital spending committed to cloud capacity for AI data centers go up consistently.”
On Wall Street, stocks reflected this optimism. The Dow Jones Industrial Average rose by 75.26 points, or 0.16%, to 47,597.38; the S&P 500 climbed 38.30 points, or 0.56%, to 6,860.64; and the Nasdaq Composite gained 254.26 points, or 1.08%, to reach 23,835.40. Each of these indices was on track for their third consecutive weekly gain, with the Nasdaq also poised for its longest winning streak since January 2018.
Globally, MSCI’s stock index increased by 0.25%, reaching 1,007.74, also on track for its seventh consecutive monthly gain, the longest since August 2021. However, the pan-European STOXX 600 index fell by 0.53%, impacted by mixed quarterly earnings and a benign inflation report from the eurozone which reinforced a cautious outlook from the European Central Bank.
Remarkably, the week also featured the Bank of Japan maintaining steady interest rates, despite expectations from economists for a hike. In currency markets, the dollar appreciated following statements from Federal Reserve officials that reduced hopes for an interest rate cut at its December meeting. Kansas City Fed President Jeffrey Schmid expressed dissent against recent cuts due to sustained high inflation, while Dallas Fed President Lorie Logan echoed that sentiment, advocating for no further cuts in December.
The dollar index rose by 0.3% to 99.77, with the euro declining by 0.29% to $1.1531. The dollar is on course for a second consecutive weekly increase and a monthly rise of 0.8%. Meanwhile, the Japanese yen slightly strengthened against the dollar.
In Japan, economic indicators pointed to core inflation rising in the capital, maintaining pressure on the Bank of Japan to consider a rate hike. On the bond market front, the yields on U.S. 10-year notes decreased by 1.2 basis points to 4.081%, while 2-year note yields fell by 2 basis points to 3.594%, reflecting changing interest rate expectations.
Lastly, oil prices showed modest gains, with U.S. crude rising by 0.28% to $60.74 per barrel, while Brent crude climbed to $65.05 per barrel, marking a 0.08% increase for the day.
