Europe Movers: ASSSA ABLOY, Kingfisher, Character Group, Hardide, Konron, Renault

The overall and core consumer price inflation accelerated in the U.K., supporting the case for the central bank to hold rates steady. 

The euro retained its downward bias amid ongoing political turmoil in France and Germany.

The DAX index increased by 0.4% to 20,318.97; the CAC-40 index rose by 0.4% to 7,391.90; and the FTSE 100 index inched higher by 0.2% to 8,211.95.

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 3.04%, the UK gilts increased to 4.55%, and Italian bonds increased to 3.41%.

The euro edged higher to $1.05; the British pound inched up to $1.27; and the U.S. dollar advanced to 89.35 Swiss cents.

Renault SA advanced 5.8% to €47.09 after reports in Japan confirmed that Honda and Nissan have initiated merger talks. 

The French automaker, Renault, owns 23% of Nissan, and Mitsubishi may join the merger. 

Japanese automakers are struggling to gain market share amid rising competition from Chinese electric vehicle makers in Asia and South America. 

Kingfisher plc advanced 0.8% to 254.80 pence, and the British home improvement company agreed to sell Brico Depot Romania to Altex Romania for €70 million. 

ASSA ABLOY advanced 1.4% to SEK 344.20, and the access solution provider said it acquired the U.S.-based Norshield Security Products. 

Kontron AG jumped 9% to €19.57 after the German technology company said it has received an order of 165 million from a European defense company. 

Hardide PLC soared 29.6% to 6.14 pence after the tungsten carbide coating company said it secured a ten-year contract for coating aerospace cargo door components. 

Character Group PLC jumped 3.8% to 274 pence after the toy and games company reported fiscal 2024 results that met investor expectations. 

Revenue in the fiscal year ending in August increased to £123.4 million from £122.6 million, pre-tax profit advanced to £5.7 million from £4.7 million, and diluted earnings per share rose to 29.72 pence from 20.0 pence a year earlier. 

The company declared a dividend per share of 19 pence, matching the level in the previous year. 

Europe Movers: ASSSA ABLOY, Kingfisher, Character Group, Hardide, Konron, Renault

The overall and core consumer price inflation accelerated in the U.K., supporting the case for the central bank to hold rates steady. 

The euro retained its downward bias amid ongoing political turmoil in France and Germany.

The DAX index increased by 0.4% to 20,318.97; the CAC-40 index rose by 0.4% to 7,391.90; and the FTSE 100 index inched higher by 0.2% to 8,211.95.

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 3.04%, the UK gilts increased to 4.55%, and Italian bonds increased to 3.41%.

The euro edged higher to $1.05; the British pound inched up to $1.27; and the U.S. dollar advanced to 89.35 Swiss cents.

Renault SA advanced 5.8% to €47.09 after reports in Japan confirmed that Honda and Nissan have initiated merger talks. 

The French automaker, Renault, owns 23% of Nissan, and Mitsubishi may join the merger. 

Japanese automakers are struggling to gain market share amid rising competition from Chinese electric vehicle makers in Asia and South America. 

Kingfisher plc advanced 0.8% to 254.80 pence, and the British home improvement company agreed to sell Brico Depot Romania to Altex Romania for €70 million. 

ASSA ABLOY advanced 1.4% to SEK 344.20, and the access solution provider said it acquired the U.S.-based Norshield Security Products. 

Kontron AG jumped 9% to €19.57 after the German technology company said it has received an order of 165 million from a European defense company. 

Hardide PLC soared 29.6% to 6.14 pence after the tungsten carbide coating company said it secured a ten-year contract for coating aerospace cargo door components. 

Character Group PLC jumped 3.8% to 274 pence after the toy and games company reported fiscal 2024 results that met investor expectations. 

Revenue in the fiscal year ending in August increased to £123.4 million from £122.6 million, pre-tax profit advanced to £5.7 million from £4.7 million, and diluted earnings per share rose to 29.72 pence from 20.0 pence a year earlier. 

The company declared a dividend per share of 19 pence, matching the level in the previous year. 

UK's Inflation Accelerated Ahead of BoE Rate Decisions, Pound Holds Firm Euro Retains Downward Bias

European markets hugged the flatline, the euro retained its downward bias, and the pound held firm ahead of rate decisions from the Bank of England. 

Benchmark indexes in Paris, Frankfurt, and London edged slightly higher in quiet trading, and investors reviewed the latest inflation update in the U.K. 

The UK's consumer price inflation accelerated to 2.6% in November from 2.3% in October, the Office for National Statistics reported Wednesday. 

Core inflation, which excludes volatile food, alcohol, tobacco, and energy prices, advanced to 3.5% in November from 3.3% in the previous month.

The latest inflation report supports the case for the Bank of England to hold rates steady at its final meeting of the year on Thursday. 

The Federal Reserve is scheduled to announce its rate decisions and economic outlook later today, and investors are anticipating a cut of 25 basis points. 

In addition, investors are estimating slower rate cuts in 2025, totaling one percentage point amid stubborn inflation and policy uncertainties of the Trump administration. 

Europe Indexes and Yields

The DAX index increased by 0.4% to 20,318.97; the CAC-40 index rose by 0.4% to 7,391.90; and the FTSE 100 index inched higher by 0.2% to 8,211.95.

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 3.04%, the UK gilts increased to 4.55%, and Italian bonds increased to 3.41%.

The euro edged higher to $1.05; the British pound inched up to $1.27; and the U.S. dollar advanced to 89.35 Swiss cents.

Brent crude increased $0.35 to $73.55 a barrel, and the Dutch TTF natural gas fell by €1.29 to €40.73 per MWh. 

Europe Stock Movers

Renault SA advanced 5.8% to €47.09 after reports in Japan confirmed that Honda and Nissan have initiated merger talks. 

The French automaker, Renault, owns 23% of Nissan, and Mitsubishi may join the merger. 

Japanese automakers are struggling to gain market share amid rising competition from Chinese electric vehicle makers in Asia and South America. 

Kingfisher plc advanced 0.8% to 254.80 pence, and the British home improvement company agreed to sell Brico Depot Romania to Altex Romania for €70 million. 

ASSA ABLOY advanced 1.4% to SEK 344.20, and the access solution provider said it acquired the U.S.-based Norshield Security Products. 

Kontron AG jumped 9% to €19.57 after the German technology company said it has received an order of 165 million from a European defense company. 

Hardide PLC soared 29.6% to 6.14 pence after the tungsten carbide coating company said it secured a ten-year contract for coating aerospace cargo door components. 

Character Group PLC jumped 3.8% to 274 pence after the toy and games company reported fiscal 2024 results that met investor expectations. 

Revenue in the fiscal year ending in August increased to £123.4 million from £122.6 million, pre-tax profit advanced to £5.7 million from £4.7 million, and diluted earnings per share rose to 29.72 pence from 20.0 pence a year earlier. 

The company declared a dividend per share of 19 pence, matching the level in the previous year. 

UK's Inflation Accelerated Ahead of BoE Rate Decisions, Pound Holds Firm Euro Retains Downward Bias

European markets hugged the flatline, the euro retained its downward bias, and the pound held firm ahead of rate decisions from the Bank of England. 

Benchmark indexes in Paris, Frankfurt, and London edged slightly higher in quiet trading, and investors reviewed the latest inflation update in the U.K. 

The UK's consumer price inflation accelerated to 2.6% in November from 2.3% in October, the Office for National Statistics reported Wednesday. 

Core inflation, which excludes volatile food, alcohol, tobacco, and energy prices, advanced to 3.5% in November from 3.3% in the previous month.

The latest inflation report supports the case for the Bank of England to hold rates steady at its final meeting of the year on Thursday. 

The Federal Reserve is scheduled to announce its rate decisions and economic outlook later today, and investors are anticipating a cut of 25 basis points. 

In addition, investors are estimating slower rate cuts in 2025, totaling one percentage point amid stubborn inflation and policy uncertainties of the Trump administration. 

Europe Indexes and Yields

The DAX index increased by 0.4% to 20,318.97; the CAC-40 index rose by 0.4% to 7,391.90; and the FTSE 100 index inched higher by 0.2% to 8,211.95.

The yield on 10-year German bonds edged higher to 2.24%, French bonds inched up to 3.04%, the UK gilts increased to 4.55%, and Italian bonds increased to 3.41%.

The euro edged higher to $1.05; the British pound inched up to $1.27; and the U.S. dollar advanced to 89.35 Swiss cents.

Brent crude increased $0.35 to $73.55 a barrel, and the Dutch TTF natural gas fell by €1.29 to €40.73 per MWh. 

Europe Stock Movers

Renault SA advanced 5.8% to €47.09 after reports in Japan confirmed that Honda and Nissan have initiated merger talks. 

The French automaker, Renault, owns 23% of Nissan, and Mitsubishi may join the merger. 

Japanese automakers are struggling to gain market share amid rising competition from Chinese electric vehicle makers in Asia and South America. 

Kingfisher plc advanced 0.8% to 254.80 pence, and the British home improvement company agreed to sell Brico Depot Romania to Altex Romania for €70 million. 

ASSA ABLOY advanced 1.4% to SEK 344.20, and the access solution provider said it acquired the U.S.-based Norshield Security Products. 

Kontron AG jumped 9% to €19.57 after the German technology company said it has received an order of 165 million from a European defense company. 

Hardide PLC soared 29.6% to 6.14 pence after the tungsten carbide coating company said it secured a ten-year contract for coating aerospace cargo door components. 

Character Group PLC jumped 3.8% to 274 pence after the toy and games company reported fiscal 2024 results that met investor expectations. 

Revenue in the fiscal year ending in August increased to £123.4 million from £122.6 million, pre-tax profit advanced to £5.7 million from £4.7 million, and diluted earnings per share rose to 29.72 pence from 20.0 pence a year earlier. 

The company declared a dividend per share of 19 pence, matching the level in the previous year. 

Yen In Focus Ahead of Rate Decisions, Japan's Trade Deficit Shrinks In November

Market sentiment in Tokyo was negative amid domestic monetary policy uncertainty and rising trade tensions with the U.S. 

The Nikkei 225 stock average declined 0.5%, and the Topix index fell 0.1% ahead of the Bank of Japan's rate decisions on Thursday. 

The Bank of Japan is likely to postpone its rate hike in 2025 as policymakers await more signals on wage growth at small- and mid-sized firms. 

SMEs have been reluctant to match 5.1% wage hikes at large corporations in 2024, amid weak profit outlook and persistent challenges in the domestic economy. 

Small and mid-sized enterprises spend about 70% of their profit on wages, significantly higher than 40% at large and international corporations, according to a September quarter corporate survey released by the finance ministry in early December. 

The yen held firm at 143.05 against the U.S. dollar ahead of the U.S. Federal Reserve's rate decisions later today. 

The U.S. Fed is widely expected to lower its fed funds rate range by 25 basis points, and the central bank is likely to announce fewer possible rate cuts in 2025 amid a resurgent inflation. 

The BoJ's possible rate hike and additional interest rate cuts by the Federal Reserve in 2025 are expected to narrow the rate differential between the U.S. and Japan. 

Japan's Trade Deficit Unexpectedly Shrank In November

Japan's trade deficit unexpectedly shrank in November after exports rose and imports declined. 

Japan's exports in November rose 3.8% to 9.15 trillion yen, and imports eased 3.9% to 9.32 trillion yen, resulting in a trade deficit of 117.6 billion yen, according to data available from the ministry of finance. 

Exports expanded for the third consecutive month and advanced from a 3.1% increase in October and a decline of 1.7% in September. 

Exports to China rose 8.9%, to Taiwan advanced 19.8%, to India jumped 9.8%, and to South Korea advanced 5.0%. 

Shipments to the ASEAN region advanced 5.5%. 

However, exports to the U.S. fell 8%, to Germany declined 11.8%, and to the European Union dropped 12.5%. 

Japan recorded a trade deficit in nine of the eleven months in 2024, as the price of imported energy products stays elevated and growth in exports remains anemic. 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 0.5% to 39,179.01, and the broader Topix index declined 0.1% to 2,725.44. 

Tech stocks in Tokyo headed lower for the second day in a row, tracking losses in overnight trading in New York. 

Advantest Corp. decreased 0.5% to ¥8,670, Tokyo Electron declined 0.3% to ¥23,850, and Screen Holdings edged up 0.2% to ¥9,239. 

Seven & I Holdings Co. Ltd. declined 0.6% to ¥2,499, Isetan Mitsukoshi fell 1.2% to ¥2,338, and Fast Retailing Co. Ltd. dropped 1.3% to ¥52,720. 

Marubeni Corp. declined 0.2% to ¥2,239.50, Itochu Corp. edged up 0.1% to ¥7,657, and Mitsui & Co. eased 0.8% to ¥3,186. 

Yen In Focus Rate Decisions, Japan's Trade Deficit Shrinks In November

Market sentiment in Tokyo was negative amid domestic monetary policy uncertainty and rising trade tensions with the U.S. 

The Nikkei 225 stock average declined 0.5%, and the Topix index fell 0.1% ahead of the Bank of Japan's rate decisions on Thursday. 

The Bank of Japan is likely to postpone its rate hike in 2025 as policymakers await more signals on wage growth at small- and mid-sized firms. 

SMEs have been reluctant to match 5.1% wage hikes at large corporations in 2024, amid weak profit outlook and persistent challenges in the domestic economy. 

Small and mid-sized enterprises spend about 70% of their profit on wages, significantly higher than 40% at large and international corporations, according to a September quarter corporate survey released by the finance ministry in early December. 

The yen held firm at 143.05 against the U.S. dollar ahead of the U.S. Federal Reserve's rate decisions later today. 

The U.S. Fed is widely expected to lower its fed funds rate range by 25 basis points, and the central bank is likely to announce fewer possible rate cuts in 2025 amid a resurgent inflation. 

The BoJ's possible rate hike and additional interest rate cuts by the Federal Reserve in 2025 are expected to narrow the rate differential between the U.S. and Japan. 

Japan's Trade Deficit Unexpectedly Shrank In November

Japan's trade deficit unexpectedly shrank in November after exports rose and imports declined. 

Japan's exports in November rose 3.8% to 9.15 trillion yen, and imports eased 3.9% to 9.32 trillion yen, resulting in a trade deficit of 117.6 billion yen, according to data available from the ministry of finance. 

Exports expanded for the third consecutive month and advanced from a 3.1% increase in October and a decline of 1.7% in September. 

Exports to China rose 8.9%, to Taiwan advanced 19.8%, to India jumped 9.8%, and to South Korea advanced 5.0%. 

Shipments to the ASEAN region advanced 5.5%. 

However, exports to the U.S. fell 8%, to Germany declined 11.8%, and to the European Union dropped 12.5%. 

Japan recorded a trade deficit in nine of the eleven months in 2024, as the price of imported energy products stays elevated and growth in exports remains anemic. 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 0.5% to 39,179.01, and the broader Topix index declined 0.1% to 2,725.44. 

Tech stocks in Tokyo headed lower for the second day in a row, tracking losses in overnight trading in New York. 

Advantest Corp. decreased 0.5% to ¥8,670, Tokyo Electron declined 0.3% to ¥23,850, and Screen Holdings edged up 0.2% to ¥9,239. 

Seven & I Holdings Co. Ltd. declined 0.6% to ¥2,499, Isetan Mitsukoshi fell 1.2% to ¥2,338, and Fast Retailing Co. Ltd. dropped 1.3% to ¥52,720. 

Marubeni Corp. declined 0.2% to ¥2,239.50, Itochu Corp. edged up 0.1% to ¥7,657, and Mitsui & Co. eased 0.8% to ¥3,186. 

China Indexes Stage Mild Rebound Amid Stimulus Details Hopes

Stock market indexes in China and Hong Kong advanced after China's state asset supervisory authority issued new guidelines. 

The Hang Seng index gained 0.6%, and the mainland-focused CSI 300 index increased 0.5% as investors held out for more details on fiscal stimulus measures. 

The State-Owned Asset Supervision and Administration Commission issued broad guidelines encouraging state-owned companies to unlock the market value of listed units. 

The vague and general guidelines encourage companies to buy back stocks, provide better disclosures, and consider mergers and acquisitions. 

Beijing policymakers are looking for ways to improve investor confidence as the finance ministry prepares to launch long-term bonds as early as January. 

China Securities Depository and Clearing, the provider of electronic depository and clearing services for Shanghai and Shenzhen stock exchanges, announced its plans to lower fees charged for dividend payout to 0.05% from 0.1%. 

CSDC also said it will cap the dividend payout fees to 1.5 million yuan, or about $206,000, effective January 1. 

Foreign portfolio investors in China and Hong Kong are reluctant to increase their holdings after Chinese policymakers failed to follow through with concrete details for the previously announced fiscal stimulus. 

Moreover, China's annual economic growth is expected to slow to just under 3% by 2026, as the world's second-largest economy struggles with elevated government debt, falling foreign direct investment, and persistent weakness in the residential real estate market. 

Moreover, Chinese companies are expanding their operations overseas to avoid a growing backlash with the European Union and the U.S. and invest in operations in Hungary, Mexico, Vietnam, Thailand, and Malaysia. 

China Stock Movers 

The Hang Seng index increased 0.6% to 19,815.30, and the mainland-focused CSI 300 index advanced 0.5% to 3,942.24. 

State-owned Chinese companies traded higher after the release of new guidelines from the SASAC. 

China Unicom gained 0.7% to HK $7.18, PetroChina advanced 1.4% to HK $5.85, CNOOC inched higher 1.5% to HK $18.38, and China Life Insurance increased 1.6% to HK $14.76. 

Li Auto advanced 3.5% to HK $88.55, BYD jumped 1.4% to HK $269.40, Geely Automobile Holdings gained 3.1% to HK $15.52, and Xiaomi Corp. advanced 2.2% to HK $30.60.

Meituan gained 0.9% to HK $160.10, Tencent Holdings edged higher 0.6% to HK $404.60, and Alibaba Group Holding Ltd. inched up 0.4% to HK $83.70. 

China Indexes Stage Mild Rebound Amid Stimulus Details Hopes

Stock market indexes in China and Hong Kong advanced after China's state asset supervisory authority issued new guidelines. 

The Hang Seng index gained 0.6%, and the mainland-focused CSI 300 index increased 0.5% as investors held out for more details on fiscal stimulus measures. 

The State-Owned Asset Supervision and Administration Commission issued broad guidelines encouraging state-owned companies to unlock the market value of listed units. 

The vague and general guidelines encourage companies to buy back stocks, provide better disclosures, and consider mergers and acquisitions. 

Beijing policymakers are looking for ways to improve investor confidence as the finance ministry prepares to launch long-term bonds as early as January. 

China Securities Depository and Clearing, the provider of electronic depository and clearing services for Shanghai and Shenzhen stock exchanges, announced its plans to lower fees charged for dividend payout to 0.05% from 0.1%. 

CSDC also said it will cap the dividend payout fees to 1.5 million yuan, or about $206,000, effective January 1. 

Foreign portfolio investors in China and Hong Kong are reluctant to increase their holdings after Chinese policymakers failed to follow through with concrete details for the previously announced fiscal stimulus. 

Moreover, China's annual economic growth is expected to slow to just under 3% by 2026, as the world's second-largest economy struggles with elevated government debt, falling foreign direct investment, and persistent weakness in the residential real estate market. 

Moreover, Chinese companies are expanding their operations overseas to avoid a growing backlash with the European Union and the U.S. and invest in operations in Hungary, Mexico, Vietnam, Thailand, and Malaysia. 

China Stock Movers 

The Hang Seng index increased 0.6% to 19,815.30, and the mainland-focused CSI 300 index advanced 0.5% to 3,942.24. 

State-owned Chinese companies traded higher after the release of new guidelines from the SASAC. 

China Unicom gained 0.7% to HK $7.18, PetroChina advanced 1.4% to HK $5.85, CNOOC inched higher 1.5% to HK $18.38, and China Life Insurance increased 1.6% to HK $14.76. 

Li Auto advanced 3.5% to HK $88.55, BYD jumped 1.4% to HK $269.40, Geely Automobile Holdings gained 3.1% to HK $15.52, and Xiaomi Corp. advanced 2.2% to HK $30.60.

Meituan gained 0.9% to HK $160.10, Tencent Holdings edged higher 0.6% to HK $404.60, and Alibaba Group Holding Ltd. inched up 0.4% to HK $83.70. 

India Movers: Aditya Birla Real Estate, Ambuja Cements, Exide Industries, RITES, Sanghi Industries, VA Tech Wabag

India indexes retained a downward bias amid worries of high valuation, economic growth slowdown, and lack of interest from foreign investors. 

The Sensex index decreased by 0.1% to 80,617.30, and the Nifty index declined by 0.1% to 24,309.60. 

On the Mumbai stock exchange, 97 stocks traded at their 52-week highs, and 11 stocks traded at their 52-week lows.

Ambuja Cements Ltd. decreased 0.9% to ₹571.50, and the company approved the merger plan with Sanghi Industries and Penna Cement Industries. 

Every 100 shares of Sanghi Industries will be exchanged for 12 shares of Ambuja Cements, according to the amalgamation plan. 

Exide Industries Ltd. decreased 2.1% to ₹449.90, and the company said it plans to invest ₹100 crore in its lithium-ion battery manufacturing production greenfield unit. 

The company said it has invested a total of ₹3,152 crore in the new production facility. 

Rites Ltd. decreased 1% to ₹299.20, and the company won a new order worth ₹122.60 crore from Meerut Development Authority for project consultancy over the next five years.

VA Tech Wabag Ltd. declined 0.3% to ₹1,883, and the company said it has cancelled its desalination plant in Saudi Arabia worth $317 million or 2,700 crore. 

Aditya Birla Real Estate Ltd. declined 1.7% to ₹2,715.15, and the company acquired a 71 acre land parcel in Boisar for ₹104 crore. 

India Movers: Aditya Birla Real Estate, Ambuja Cements, Exide Industries, RITES, Sanghi Industries, VA Tech Wabag

India indexes retained a downward bias amid worries of high valuation, economic growth slowdown, and lack of interest from foreign investors. 

The Sensex index decreased by 0.1% to 80,617.30, and the Nifty index declined by 0.1% to 24,309.60. 

On the Mumbai stock exchange, 97 stocks traded at their 52-week highs, and 11 stocks traded at their 52-week lows.

Ambuja Cements Ltd. decreased 0.9% to ₹571.50, and the company approved the merger plan with Sanghi Industries and Penna Cement Industries. 

Every 100 shares of Sanghi Industries will be exchanged for 12 shares of Ambuja Cements, according to the amalgamation plan. 

Exide Industries Ltd. decreased 2.1% to ₹449.90, and the company said it plans to invest ₹100 crore in its lithium-ion battery manufacturing production greenfield unit. 

The company said it has invested a total of ₹3,152 crore in the new production facility. 

Rites Ltd. decreased 1% to ₹299.20, and the company won a new order worth ₹122.60 crore from Meerut Development Authority for project consultancy over the next five years.

VA Tech Wabag Ltd. declined 0.3% to ₹1,883, and the company said it has cancelled its desalination plant in Saudi Arabia worth $317 million or 2,700 crore. 

Aditya Birla Real Estate Ltd. declined 1.7% to ₹2,715.15, and the company acquired a 71 acre land parcel in Boisar for ₹104 crore. 

Federal Reserve Struggles to Cool Inflation to 2% While Pursuing Loose Monetary Policy

Producer price inflation increased 0.4% in November from the previous month and accelerated from 0.3% in October, according to the latest data released by the U.S. Bureau of Labor Statistics. 

Core producer price inflation, which excludes volatile food and energy prices, accelerated to a monthly 0.3% from 0.2% and stalled at an annual 3.4%. 

On Wednesday, the government agency reported consumer prices accelerated in November, largely driven by higher costs of shelter, medical care, and vehicles. 

The annual consumer price inflation increased to 2.7% in November from 2.6% in October, largely driven by persistent increases in the cost of shelter, medical care, new and used vehicles, and furnishing. 

Core consumer price inflation, which excludes volatile food and energy prices, held at 3.3%, unchanged from September and October, the U.S. Bureau of Labor Statistics reported Wednesday. 

On a monthly basis, overall and core inflation rose 0.3%, largely driven by an increase in shelter prices. 

Investors have bid up stocks in 2024 in the hopes that inflation is on a sustained downward path and likely to reach the Fed's target rate of 2% in the near future. 

However, inflation has stalled near 3% for nearly six months and shows no sign of easing. In addition, most of the slowdown in inflation is reflecting a sharp fall in energy prices, which are not impacted by the Fed's actions. 

Core consumer price inflation is likely to stay above 3% in 2025 and beyond for two reasons: first, because of wage inflation of 4%, and second, most service providers are still passing on higher prices to consumers at a faster than 3% annual rate. 

Federal Reserve Struggles to Cool Inflation to 2% While Pursuing Loose Monetary Policy

Producer price inflation increased 0.4% in November from the previous month and accelerated from 0.3% in October, according to the latest data released by the U.S. Bureau of Labor Statistics. 

Core producer price inflation, which excludes volatile food and energy prices, accelerated to a monthly 0.3% from 0.2% and stalled at an annual 3.4%. 

On Wednesday, the government agency reported consumer prices accelerated in November, largely driven by higher costs of shelter, medical care, and vehicles. 

The annual consumer price inflation increased to 2.7% in November from 2.6% in October, largely driven by persistent increases in the cost of shelter, medical care, new and used vehicles, and furnishing. 

Core consumer price inflation, which excludes volatile food and energy prices, held at 3.3%, unchanged from September and October, the U.S. Bureau of Labor Statistics reported Wednesday. 

On a monthly basis, overall and core inflation rose 0.3%, largely driven by an increase in shelter prices. 

Investors have bid up stocks in 2024 in the hopes that inflation is on a sustained downward path and likely to reach the Fed's target rate of 2% in the near future. 

However, inflation has stalled near 3% for nearly six months and shows no sign of easing. In addition, most of the slowdown in inflation is reflecting a sharp fall in energy prices, which are not impacted by the Fed's actions. 

Core consumer price inflation is likely to stay above 3% in 2025 and beyond for two reasons: first, because of wage inflation of 4%, and second, most service providers are still passing on higher prices to consumers at a faster than 3% annual rate. 

Industrial Output Shrank, Retail Sales Advanced In November

Industrial output shrank 0.9% from a year ago in November, the Federal Reserve reported Tuesday. 

Manufacturing output, which accounts for 80% of industrial production, inched higher 0.2% from the previous month, offset by a 1.3% decrease in utility output and distribution and a 0.9% fall in mining production. 

Retail sales in November increased from the previous month and from the previous year, suggesting resilient consumer spending. 

Preliminary estimates of retail and food services sales, seasonally adjusted but not for inflation, rose monthly 0.7% and 3.8% from a year ago, according to data released by the U.S. Census Bureau. 

Retail trade sales jumped 4.1%, motor vehicle and parts dealer sales were up 6.5%, and nonstore retail sales surged 9.8% from a year ago, respectively.

Industrial Output Shrank, Retail Sales Advanced In November

Industrial output shrank 0.9% from a year ago in November, the Federal Reserve reported Tuesday. 

Manufacturing output, which accounts for 80% of industrial production, inched higher 0.2% from the previous month, offset by a 1.3% decrease in utility output and distribution and a 0.9% fall in mining production. 

Retail sales in November increased from the previous month and from the previous year, suggesting resilient consumer spending. 

Preliminary estimates of retail and food services sales, seasonally adjusted but not for inflation, rose monthly 0.7% and 3.8% from a year ago, according to data released by the U.S. Census Bureau. 

Retail trade sales jumped 4.1%, motor vehicle and parts dealer sales were up 6.5%, and nonstore retail sales surged 9.8% from a year ago, respectively.

U.S. and Global Investors Turn Cautious Ahead of Fed's Rate Decisions and Rate Path Outlook

Investors turned cautious ahead of the Federal Reserve's rate decisions on Wednesday, and market participants debated future interest rate paths and levels. 

The S&P 500 index declined 0.4%, and the Nasdaq Composite fell 0.3% amid growing worries that interest may stay higher for longer amid resurgent inflation. 

Investors are anticipating the Federal Reserve to cut the fed funds rate by 25 basis points and announce fewer rate cuts in 2025 amid resurgent inflation, President-elect Donald Trump's proposed tariffs, and policy uncertainties. 

At close on Monday, the Nasdaq Composite closed at a new record high, and the S&P 500 index hovered near the high set last week. 

Artificial intelligence enthusiasm and a positive economic backdrop continued to fuel the post-election rally. However, the four-week-long rally is hitting the wall of reality. 

Over the last three weeks, Wall Street enthusiasm has been waning as fewer stocks participate in the upswing and investors factor in the negative impact of higher tariffs, elevated budget deficits, and the rising level of federal government debt. 

Industrial Output Shrank, Retail Sales Advanced In November  

On the economic front, industrial output shrank 0.9% from a year ago in November, the Federal Reserve reported Tuesday. 

Manufacturing output, which accounts for 80% of industrial production, inched higher 0.2% from the previous month, offset by a 1.3% decrease in utility output and distribution and a 0.9% fall in mining production. 

Retail sales in November increased from the previous month and from the previous year, suggesting resilient consumer spending. 

Preliminary estimates of retail and food services sales, seasonally adjusted but not for inflation, rose monthly 0.7% and 3.8% from a year ago, according to data released by the U.S. Census Bureau. 

Retail trade sales jumped 4.1%, motor vehicle and parts dealer sales were up 6.5%, and nonstore retail sales surged 9.8% from a year ago, respectively.

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.4% to 6,052.53, the Nasdaq Composite fell 0.4% to 20,113.54, and the Russell 2000 index declined by 0.9% to 2,339.81. 

The yield on 2-year Treasury notes edged higher to 4.29%, 10-year Treasury notes inched up to 4.43%, and 30-year Treasury bonds increased to 4.62%.

WTI crude oil decreased $1.10 to $69.61 a barrel, and natural gas prices edged down 7 cents to $3.13 a thermal unit.

Gold decreased by $11.07 to $2,640.36 an ounce, and silver fell by $0.05 to $30.45. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher by 0.08 to 106.77.

U.S. Stock Movers 

Palo Alto Networks edged down 0.5% to $201.52 after the cybersecurity company's stock split two-for-one. 

Broadcom Inc. declined 0.6% to $248.87 and eased from a jump of more than 30% in the previous week's trading after the company announced a sharp rise in sales in its artificial intelligence-linked chips and products. 

SolarEdge Technologies soared 14% to $14.26 after Goldman Sachs revised its opinion to "buy" from "sell," citing the company's turnaround in 2025. 

Pfizer Inc. gained 2.9% to $25.25 after the pharmaceutical company reiterated its 2025 earnings, and the company plans to sell its non-core business and repay its debt following the decline in Covid-19 products. 

Coinbase Global Inc. advanced 1.1% to $318.83, and MicroStrategy gained 1.1% to $413.63, and crypto-linked stocks continued to extend their 2024 rally following the rise in price of bitcoin to $07,000. 

EVgo plunged 23.5% to $4.83 after the company announced an affiliate of LS Power Equity Partners sold 23 million shares at $5.0 per share, 20% lower than the last closing price on Monday. 

The company also announced the closing of a $1.25 billion guaranteed loan facility from the U.S. Department of Energy on Thursday, initially announced on October 2. 

Red Cat Holdings plunged 14.7% to $8.91, and the stock gave back some of the 27% advance in the previous session after the drone maker announced a partnership with Palantir. 

European Markets Struggle Amid Political Turmoil

European markets struggled to stay above the flatline amid weakening sentiment and worsening economic outlook.

Benchmark indexes in Frankfurt and Paris managed to rebound, but they eased in London amid economic growth and inflation worries. 

Germany's Chancellor Olaf Scholz lost a no-confidence vote in the parliament, paving the way for the next general election as early as February. 

Scholz's loss was widely anticipated after the three-way coalition partners failed to agree on the proposed budget and fiscal deficit targets. 

The political chaos in Germany comes at a difficult time when the economy is struggling to advance, defense expenditures are rising, and trade wars with the U.S. and China are looming. 

Moreover, Germany and France have been losing international competitiveness amid rising competition from Asia. 

The euro traded at a two-month low, and the currency is expected to weaken further as the next parliament is likely to be just as divided among several political ideologies, which could make the next coalition government just as difficult to function. 

German Business Climate Index Deteriorates to Lowest Since May 2020

The Ifo Business Climate Indicator for Germany fell for the second consecutive month to 84.7 in December from 85.6 in November, the Ifo Institute said in its monthly report. 

While sentiment in the construction sector improved, it worsened in the manufacturing and services sectors. 

The index dropped to the lowest since May 2020, but the decline was mostly because of the pessimistic outlook. 

"The weakness of the German economy has become chronic," the Ifo report noted. 

The sub-index for business expectations dropped sharply to 84.4 from 87, but the measure for current conditions improved to 85.1 from 84.3 in the previous month. 

Business sentiment remained the weakest in the construction and manufacturing sectors. 

Euro Area Trade Surplus Shrank In October 

The Euro Area trade surplus decreased for the second consecutive month in October amid weakening exports, Eurostat reported Wednesday. 

The currency union's trade surplus shrank to €6.8 billion in October from €9.4 billion in the previous year, after exports rose 2.1% from a year ago to €254 billion and imports advanced 3.2% to €247.2 billion. 

In the wider region of the European Union, trade surplus plunged to €3.9 billion from €8.4 billion a year earlier, after exports advanced at a faster pace than imports. 

Exports rose 0.9% to €227 billion, and imports advanced 3% to €223.1 billion. 

This decrease in trade surplus was mainly driven by the fall in surplus in chemicals and related products from €19.3 billion to €17.8 billion and an increase in the deficit for energy from €26.0 billion to €29.1 billion.

Despite the export weakness in recent months, the overall trade surplus in the January to October period soared from the corresponding period in the previous year. 

In the ten months to October 2024, the eurozone recorded a surplus of €143.3 billion, compared with €22.7 billion in the previous year.

Europe Indexes and Yields

The DAX index decreased by 0.3% to 20,253.69; the CAC-40 index rose by 0.1% to 7,365.70; and the FTSE 100 index inched lower by 0.8% to 8,195.20.

The yield on 10-year German bonds edged lower to 2.23%, French bonds inched up to 3.03%, the UK gilts increased to 4.51%, and Italian bonds increased to 3.40%.

The euro edged higher to $1.05; the British pound inched up to $1.27; and the U.S. dollar advanced to 89.21 Swiss cents.

Brent crude decreased $1.09 to $72.12 a barrel, and the Dutch TTF natural gas rose by €2.40 to €41.88 per MWh. 

Europe Stock Movers

Energy explorers declined on stock exchanges following the weakness in crude oil prices amid expectations of falling demand growth in China. 

Shell PLC fell 1.4% to 2,421 pence, BP plc eased 0.8% to 381.95 pence, TotalEnergies SE eased 1.5% to €51.70, and Repsol SA declined 1.6% to €11.09. 

Capita PLC dropped 9.2% to 15.84 pence after the UK-based outsourcing firm reported an 8% decline in revenue in the eleven months to November. 

Thyssenkrupp Nucera AG jumped 14.1% to €10.17 after the German electrolysis company reported record quarterly revenue for its alkaline electrolysers. 

Revenue in the fiscal fourth quarter increased 50% to €250 million from €167 million, net income jumped 81% to €10 million from €6 million, and earnings per share advanced to 8 cents from 4 cents a year ago. 

For the full year, revenue increased 4% to €636 million from €613 million; net income plunged 52% to €11 million from €24 million, and earnings per share fell 60% to 9 cents from 22 cents a year ago. 

Investors Divided About BoJ's Rate Decisions, Softbank's Big U.S. Investment Pledge Invites Skepticism 

Stock market indexes in Tokyo reversed morning gains to close down as investors turned cautious ahead of rate decisions from central banks of Japan and the U.S. 

The Nikkei 225 stock average declined 0.3%, and the Topix index dropped 0.4% amid growing uncertainty about the rate path in Japan. 

On Wednesday, the U.S. Federal Reserve is widely anticipated to cut its policy rate by 25 basis points, and the central bank may settle on fewer rate cuts in 2025 amid resurgent inflation. 

The Bank of Japan on Thursday may postpone its rate increase till its first meeting in 2025 as policymakers are signaling a lack of urgency in raising rates. 

Central banks of the UK, Sweden, Norway, Thailand, the Philippines, and Indonesia are set to announce their rate decisions this week amid elevated trade tensions and rising political uncertainty in the eurozone. 

The yen strengthened against the U.S. dollar ahead of the Bank of Japan's rate decisions, as the rate differential between the two currencies is expected to narrow over the next few months. 

Japan Stock Movers 

The Nikkei 225 Stock Average decreased 0.3% to 39,364.68, and the broader Topix Index fell 0.4% to 2,728.20. 

SoftBank jumped 4.4% to 2,728.20 after CEO Masayoshi Son announced a plan to invest $100 billion in the U.S. and create 100,000 jobs without giving details. 

Son had made a similar pledge to invest $50 billion in 2016 at the start of the first presidential term of Donald Trump, and those announcements failed to deliver the promised job creation of 50,000. 

Softbank Group has $27 billion in cash, and the Vision Fund controlled by the company has less than $3 billion available for investment. 

Son's access to capital largely comes from the Middle East sovereign funds, and the Vision Fund's previous investments in Uber, DoorDash, and Arm Holdings PLC were the few success stories amid a string of failed investments.

While Trump favors splashy news announcements, a similar pledge in the first presidential term, to invest billions in a fabrication plant by Foxconn Technology, was quickly abandoned after an initial investment of a few million dollars. 

President Trump's bombastic claims of attracting foreign investments are not designed to deliver for U.S. workers or entrepreneurs but are mostly viewed as political stunts. 

Advantest Corp. plunged 9.5% to ¥8,664 after the company released its latest testing solution for advanced testing. 

Tokyo Electron jumped 0.8% to ¥23,840.0. Screen Holdings jumped 0.4% to ¥9,206, and Lasertec Corp. advanced 1.2% to ¥15,485. 

Nippon Steel Corp. declined 1.6% to ¥2,982.50 amid growing uncertainty about the company's plans to acquire U.S. Steel as workers' unions, regulators, and politicians pour cold water over the proposed acquisition. 

Japan Steel Works advanced 1.6% to ¥6,469. 

Fast Retailing Co. Ltd. added 1.3% to ¥53,430; Isetan Mitsukoshi gained 0.2% to ¥2,366.50, and Seven & I Holdings Co. Ltd. inched up 0.1% to ¥2,513. 

China Investors Lose Faith In Previously Announced Fiscal Measures Amid Lack of Details 

Stock market indexes in China and Hong Kong struggled to advance amid a lack of details about the fiscal measures. 

The Hang Seng index declined 0.4%, and the mainland-focused CSI 300 index gained 0.3% as investors erased the previous week's gains in two days of trading this week.

Investor enthusiasm waned after the economic work conference failed to provide additional details about the implementation plans of the previously announced fiscal measures in late September and early October. 

Over the last six weeks, the Hang Seng index has lost about 15% from the recent peak after policymakers failed to show urgency to announce implementation plans to revive property market transactions and consumer confidence. 

Market sentiment improvement was short-lived after a report suggested that the Chinese government is likely to expand its deficit to 4% of gross domestic product in 2025 from 3% in the current year. 

Investors are anticipating that the Chinese government will issue long-term bonds worth more than three trillion yuan to finance the proposed fiscal measures. 

China Stock Movers 

The Hang Seng index dropped 0.4% to 19,728.82, and the CSI 300 index edged higher 0.3% to 3,923.0. 

Alibaba Group Holding Ltd. declined 1.4% to HK $83.15 after the e-commerce platform operator agreed to sell its department store chain Intime Retail Group for 7.4 billion yuan, or about $1 billion, to Youngor Fashion.

Alibaba will book a loss of 9.3 billion yuan, or $1.3 billion, linked to the sale of the department store chain to a fashion group and Intimae's management, 

Alibaba recently announced its restructuring that sharpened its focus on core e-commerce business and walked away from its offline operations amid rising domestic competitions from PDD's Pinduoduo and ByteDance's short-video app Douyin. 

Among the most actively traded companies, Zhongsheng Group declined 3.2% to HK $15.36, and WuXi Biologics declined 2.7% to HK $16.84. 

China Resources Beer Holdings dropped 1.9% to HK $25.70, and Budweiser Brewing Company fell 1% to HK $7.25.