The countdown to Christmas has begun as we entered the final month of the year. The Santa rally has taken off early as the S&P 500 has now notched its 50th all-time high of 2024.
British house prices rose by 3.7% in November (year-on-year) reflecting the largest rise in exactly two years. The Bank of England (BoE) also reported the most mortgage approvals by lenders in the last month since August 2022. The increased housing activity stems from the Labour party’s decision to end stamp-duty reliefs at the beginning of the new tax year in April 2025, bringing forward house buyers purchases and hence boosting house prices in the short term.
In just twelve days, the BoE will meet again for the final time this year to decide whether a pause is needed in their rate-cutting path. Inflation figures for November will be released the day before the meeting, and the BoE will fully consider other leading indicators. Firms are reacting to the national insurance tax rises and may raise prices instead of cutting jobs, which would be inflationary. BoE Governor Andrew Bailey remained coy on their next move stating there was still “distance to travel” to control inflation.
The European Central Bank will meet next Thursday and has already cut interest rates three times since June. Finnish policymaker Olli Rehn has spoken ahead of the meeting, explaining the increased justification he sees for cuts. He pointed out weakening economic growth around the Eurozone and rising inflation, which is still within touching distance of the 2% target.
After the debacle over the French budget last week, it was expected that Premier Michel Barnier would be forced out of parliament. On Wednesday, 331 French members of parliament voted no confidence, forcing Barnier’s resignation. His tenure, beginning only four months ago is the shortest of any premier in 66 years. President Macron must act quickly in his search for a new prime minister, one strong enough to push a new 2025 budget through a deeply divided government.
Across the Atlantic ocean, US services sector PMI’s slowed to 52.1 for November following strong results over the previous months of September and October. A figure above 50 means the sector remains in the expansionary zone, which is certainly a positive reflection on the US economy. On Wednesday the US Fed released the last beige book for the year, which provides insight into economic conditions across the twelve federal districts. The takeaway from the report is that economic growth was stable and growing across most districts; however, businesses were uneasy about the incoming tax and regulation that will be implemented in the New Year as Trump takes the hot seat.
US non-farm payrolls was released this Friday afternoon with 227,000 jobs added in November. This shows a rebound from the 36,000 jobs in the previous month which was heavily affected by the strikes and hurricane Milton that passed over Florida.
We’ve previously written about the artificial intelligence company Super Micro Computer, as they are late in filing their annual and quarterly earnings reports. Their previous auditors Ernst & Young, resigned in October following this however a special committee announced this week “no findings of fraud or misconduct”. This news led the share price rally of almost 25% over the week, however the company is not out of the woods yet. Super Micro’s new auditor, BDO has yet to certify the company’s earnings, and the company is on the timer to deliver their financial reports or face being delisted from the Nasdaq.
We expect next week to be as busy as this week, with inflation reports from the US and Germany, UK GDP and central bank decisions from the European Central Bank and Canada. A given possibility may be the continued rise of Bitcoin as it breached the $100,000 mark on Thursday, up almost 3% for the week.
Nathan Amaning, Investment Analyst
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