Moody’s Investors Service downgraded its credit outlook on China from stable to negative as the country’s debt levels continue to rise. The agency cited increased risks related to lower medium-term economic growth and the downsizing of the property sector. This news caused the iShares MSCI China ETF to fall nearly 2% in premarket trading.
Goldman Sachs’ Scott Rubner noted that the market is in the process of unwinding some of the long positions taken in the last month, leading to a 2% decrease in the MCHI. The S&P 500 saw its biggest monthly gain since July in November, but market dynamics are causing a downturn.
Sweden’s Ericsson saw its shares climb 9% after announcing a partnership with AT&T for the deployment of an open radio access network (Open RAN) in the U.S. AT&T could spend nearly $14 billion over a five-year contract with Ericsson, pushing the value of Ericsson’s stock. Meanwhile, Finland’s Nokia’s stock fell 7.35% to its lowest level in years as the company lost more share of AT&T’s supplier work to Ericsson.
Retail sales in the UK rose 2.7% in November, slightly above the 2.6% average of the last three months, but down from the 4.2% growth in November 2022. Food sales went up, but non-food sales fell, showing a slump in Christmas spending. The British Retail Consortium noted that momentum for holiday spending failed to hold throughout November.
Meanwhile, the Caixin China services purchasing managers’ index for November rose to its highest in three months at 51.5. This reading diverged from China’s official PMI, showing a contraction. Tokyo’s inflation rate also shrank to 2.6%, its lowest since July 2022.
The Reserve Bank of Australia maintained its benchmark policy rate at 4.35% in December as expected. The bank noted that the limited information on the domestic economy since November has been in line with expectations. Also, State Street found that high-yield bond ETFs saw $11 billion inflows in November, their best month ever, while small caps are projected to outperform in 2024.
Tech company Gitlab saw its shares jump more than 16% in after-hours trading after posting better-than-expected fiscal third quarter results, including its first-ever adjusted operating profit. However, Merit Medical Systems fell 4.1% after announcing a proposed sale of $550 million convertible note in a private placement.
Overall, stock futures opened slightly below the flatline on Monday night. Dow Jones Industrial Average futures fell 31 points, while futures tied to the S&P 500 and Nasdaq Composite also slipped 0.1%.