Global stock markets were volatile on Monday (September 30). Affected by increasing economic uncertainty and tensions in the Middle East, many major stock market indexes fell slightly. However, the Chinese market rose sharply driven by government stimulus measures. The CSI 300 Index surged by 9.1%, the largest increase since 2008. The blue-chip CSI 300 Index rose by 8.5%, and the Shanghai Composite Index rose by 7.1%. The U.S. market is looking forward to this week's economic data to evaluate the Federal Reserve's next move. The futures market predicts that the probability that the Federal Reserve will cut interest rates by 50 basis points on November 7 is about 55%.
European stocks fell as automakers' profit warnings and China's economic stimulus measures weakened the boost. Jeep maker Stellantis NV cut its profit margin forecast after Volkswagen issued a second profit warning and Aston Martin said its 2024 EBITDA would be below last year's level. Marcus Poppe, co-head of European equities at DWS Investment, said, "The improvement in sentiment we are seeing now is due to China's stricter measures, which is good news for European stocks." But he also reminded, "But I It would be prudent to think that in three to four weeks companies will say: 'China's economy is picking up'."
China's markets are on fire as investor funds shift from bonds and deposits to stocks, driven by government stimulus measures, and brokerages are overwhelmed by an influx of retail clients ahead of the holidays, congesting trading systems. Dickie Wong, executive director of the research department of KINGSTON SECURITIES in Hong Kong, said, "This is really a big shift, the policy is so intensive, and we have never seen such clear instructions to stop the decline in house prices and support the stock market. Many foreign investors are afraid of missing the opportunity, Local retail investors asked me what they should add, and institutional investors are rushing into the market to catch up, with massive inflows pushing the Hang Seng Index to 21,000 points."
U.S. markets are looking forward to this week's economic data to assess the Federal Reserve's next move. Matt Tickle, chief investment officer at advisory firm Barnett Waddingham, said, "China's stimulus measures have caused some noise, but the market may be rushing away from these initial measures, which may lead to disappointment if the measures are not sustained. Now is the time to pay attention to the central bank." "
Tensions in the Middle East also affected global stock markets. Israel killed Hezbollah leader Hassan Nasrallah in Beirut, and the market awaited Iran's response, causing oil prices to rise. Brent crude futures rose 52 cents to $72.50, and U.S. WTI crude oil rose 40 cents to $68.58.
In addition to the situation in the Middle East, Hurricane Helene's attack on the southern and east coast of the United States has also raised concerns in the market that it may disrupt the supply chain of petroleum products and trigger supply concerns in the world's largest oil producer.
Generally speaking, the global stock market is currently facing multiple challenges, including economic uncertainty, tension in the Middle East, geopolitical risks, etc., and there is still great uncertainty in market trends. Investors need to pay close attention to market dynamics and make investment decisions based on their own circumstances.
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