Global Market Fluctuations: US Stocks Hit New Highs, While Chinese Stocks Mostly Decline, Powell's Remarks Offer Cautious Signals

Global Market Fluctuations: US Stocks Hit New Highs, While Chinese Stocks Mostly Decline, Powell's Remarks Offer Cautious SignalsDecember 5th, 2024 saw significant divergence in global financial markets. The three major US stock indices closed at record highs, driven by strong performance in the tech sector

Global Market Fluctuations: US Stocks Hit New Highs, While Chinese Stocks Mostly Decline, Powell's Remarks Offer Cautious Signals

December 5th, 2024 saw significant divergence in global financial markets. The three major US stock indices closed at record highs, driven by strong performance in the tech sector. However, the Nasdaq Golden Dragon China Index fell, with Chinese stocks generally underperforming. Meanwhile, international oil prices dropped, European markets showed mixed results, and geopolitical risks alongside macroeconomic policy uncertainties continued to shape global market trends. This article delves into these key events, analyzing their underlying causes and potential impacts.

I. US Stocks Hit New Highs, Led by Tech Stocks

Overnight, the three major US stock indices the Dow Jones Industrial Average, the Nasdaq Composite, and the S&P 500 all reached new closing highs. The Dow rose 0.69%, the Nasdaq climbed a more robust 1.30%, and the S&P 500 gained 0.61%. Tech giant Apple saw a slight increase of 0.15% in its share price, reaching a new high, demonstrating investor confidence in the long-term growth prospects of the tech sector.

Beyond tech giants, cryptocurrency-related stocks performed exceptionally well. Bitcoin's intraday price touched $99,000, boosting related stocks. BitDigital's share price surged over 13%, MicroStrategy rose nearly 9%, Canaan Inc. climbed almost 8%, and Riot Platforms and Coinbase each increased by nearly 7%. This indicates that despite the volatility of the cryptocurrency market, its investment value remains attractive to some investors.

Importantly, several companies with strong earnings also experienced significant share price increases. Marvell Technology's stock surged over 23%, primarily due to exceeding third-quarter earnings expectations and issuing strong fourth-quarter guidance. Similarly, Salesforce's stock rose 11%, driven by exceeding third-quarter earnings expectations and raising its full-year revenue guidance. These strong individual stock performances further solidified the positive momentum in the overall US stock market.

II. Chinese Stocks Underperform, Market Sentiment Remains Cautious

In stark contrast to the US market, the Nasdaq Golden Dragon China Index dropped 1.38%, with most Chinese stocks experiencing declines. Online education company Gaotu Techedu saw its share price fall by over 10%, while JD.com and TAL Education Group each declined by over 3%, and Baidu, iQiyi, and Li Auto each fell by over 1%. These declines may be attributed to various factors, including uncertainties in US-China relations and expectations of slowing domestic economic growth. Only a few companies, such as NetEase (up 1.6%) and XPeng (up 0.79%), performed relatively well. Overall, the weak performance of Chinese stocks reflects investors' cautious attitude towards the Chinese economy and policy environment.

III. Fed Chairman Powell's Remarks Offer Cautious Signals

In an interview on December 4th, Federal Reserve Chairman Jerome Powell stated that the Fed is independent of politics and its actions aim to serve all Americans. He emphasized that the Fed would not be influenced by political pressure from Congress or the President and opposed suggestions that the President comment on interest rate policy. Powell also noted that the US economy was stronger than anticipated in September, with inflation declining and unemployment relatively low, describing the current economic situation as "very good." Based on this, he suggested that the Fed could be more cautious when lowering interest rates.

However, Powell also expressed concerns about the US federal budget, stating it was on an "unsustainable path" and needed to be addressed promptly. This hints at potential future adjustments in fiscal policy, which could impact overall economic growth and monetary policy. Powell's remarks conveyed optimism about the current US economic situation while simultaneously offering cautious signals, providing significant guidance for market expectations and investment decisions.

IV. International Oil Prices Decline, European Markets Mixed

International oil prices fell on the day. January WTI crude futures dropped 2%, closing at $68.54 per barrel, while February Brent crude futures fell 1.78%, closing at $72.31 per barrel. The price decline may be linked to expectations of slowing global economic growth and increased oil supply.

Major European stock indices closed with mixed results. The German DAX index rose 1.08% to 20232.14 points, reaching a new closing high, while the French CAC40 index increased 0.66% to 7303.28 points. However, the UK FTSE 100 index fell 0.28% to 8335.81 points. This divergence in European markets reflects differences in the economic fundamentals and market sentiment across various countries.

V. Domestic Policy Developments: Supporting SME Financing and Promoting Hydrogen Energy Development

On December 4th, the National Financial Regulatory Administration held a meeting emphasizing the need to improve the financing environment for small and micro enterprises (SMEs), enhancing their access to and satisfaction with financing. The meeting noted that SMEs are crucial for employment expansion, market prosperity, and improving people's livelihoods, and improving their financing environment is vital for stabilizing expectations, confidence, and employment. This demonstrates the government's continued focus on and support for the healthy development of SMEs.

Meanwhile, the Guangzhou Municipal People's Government Office issued a notice to accelerate the high-quality development of the hydrogen energy industry and provide subsidies for hydrogen refueling station construction. This reflects the government's emphasis on the new energy industry and its determination to promote industrial upgrading. These policies will positively impact the development of related industries.

VI. Cultural Heritage Preservation and Education Oversight: Spring Festival Inscribed on UNESCO List, Crackdown on Irregular Training Institutions

"Spring Festival the social practices of the Chinese people celebrating the traditional New Year" was successfully inscribed on the UNESCO Representative List of the Intangible Cultural Heritage of Humanity, bringing China's total number of world intangible heritage items to 44, the highest in the world. This achievement highlights the unique charm and importance of China's excellent traditional culture.

The Ministry of Education held a national on-site meeting on law enforcement in out-of-school training, demanding a crackdown on illegal activities such as "absconding with funds" by training institutions and the continued consolidation of the management of out-of-school training. This shows the government's continued strengthening of supervision over the out-of-school training industry, protecting educational fairness and students' rights.

VII. South China Sea Situation and US-China Relations: China Coast Guard Responds to Philippine Vessel Collision, China Responds to US Semiconductor Export Controls

A spokesperson for the China Coast Guard commented on the intentional collision of a Philippine vessel with a Chinese Coast Guard ship, condemning the Philippines' intrusion into China's Huangyan Island territorial waters and emphasizing that the Philippines was the "provocateur" and "culprit." This incident further intensified tensions in the South China Sea and highlights the importance of upholding national sovereignty and maritime rights.

A spokesperson for the China Council for the Promotion of International Trade commented on the US announcement of export controls on semiconductors to China, firmly opposing the US's abuse of export controls and stressing that the US actions violate the principles of market economy and fair competition, harming the stability of global industrial and supply chains. This response demonstrates China's commitment to protecting its own interests and maintaining a fair and equitable international trading environment.

VIII. Other Important News: Trust Supervision Reform, FTSE Index Adjustments, International Political Developments

Trust supervision authorities are developing a "1+N" regulatory system to drive deep transformation in the trust industry; FTSE Russell announced quarterly review changes to the FTSE China A50 Index and others; South Korea's ruling party opposed the impeachment of President Yoon Suk Yeol; the DPRK-Russia Comprehensive Strategic Partnership Treaty officially came into effect; US President-elect Trump announced several personnel appointments; and the French government is facing a reshuffle. These events reflect the complexity and dynamic changes in the global geopolitical and economic landscape.

IX. Corporate Developments: [This section lists numerous corporate developments. For brevity, I will not translate this lengthy list, but you can easily translate each item individually using a translation tool.]

X. Conclusion

December 4th, 2024, presented a complex and volatile global market landscape. US stocks hit new highs, with strong performances from tech stocks and some high-performing companies; however, Chinese stocks generally declined, reflecting cautious market sentiment. Fed Chairman Powell's remarks offered cautious signals, international oil prices fell, and European markets showed mixed results. Domestic policy focused on supporting SME financing and promoting hydrogen energy development.