Market Commentary - October 12, 2021

Early session rally on Wall Street, boosted by energy stocks and lifting S&P500 higher, only to have overriding concerns surrounding inflation and supply shortages on the wider market ahead of third quarter earning seasons left the benchmark closing down 0.7%. The tech-heavy Nasdaq dropped 0.64%.

In Europe, a strong rally in mining stocks on Monday supported European equities, retracing all losses posted early in the session over similar worries from across the Atlantic. As the mining sector surged 3% to post its biggest daily gain in three months, the STOXX 600 index end the day marginally higher. While London’s FTSE 100 outperform with a 0.7% rise, and both CAC 40 and DAX remain nearly flat.

Elsewhere in Asia, Japanese shares fell in the morning session of Tuesday after a three-session rally, tracking a weaker finish on Wall Street which drove a sell-off of its big tech stocks, with the Nikkei 225 slid 0.81% after the closing of the morning session. HK’s Hang Seng Index dropped as well, by 1.02% to 25,066.05 at the morning close.

The price of US crude oil hit a fresh seven-year high on Monday on fears that fuel demand was recovering faster from last year’s economic slowdown than producers could bring supply to the market, with the price hit a high of more than $82 a barrel before pulling back to $80.52. Meanwhile, Bitcoin extended its rally above $57K against the Dollar, while the Turkish Lira continue to depreciate after yesterday’s descend, closed at nearly 9.0 against the greenback.

image_2021_10_12T05_20_14_648Z

Figure 1 (Source: IS Prime) SPT.CO.US Daily : Amid the energy crisis, crude has climbed more than 16% since the start of September 2021.

Headliner to Review
  • The monthly Italian Industrial Production index was released, with the actual figures decreasing by 0.2% compared with the previous month.
  • The monthly Japanese PPI index came out to be an increase of 6.3%, greater than the forecasted value of 5.8%.

Headliner to Watch

  • US monthly CPI is projected to match August’s 0.3% monthly increase, as consumer inflation and prices paid to producers will probably advance at healthy paces in September, suggesting cost pressures continue to percolate.
  • UK monthly GDP figures is expected to increase by 0.5%, much higher than 0.1% from the previous month.

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Authors:
Antony Tan
Kerry Man