Market Commentary - November 14, 2022

Wall Street equities rallied significantly last week on cooler than expected inflation data, as investors now believing the Fed would slow the pace of interest rate tightening in December. The blue-chip S&P 500 gained 0.96% last Friday, to add almost 6% over the week. While the tech-heavy Nasdaq indices advanced 8.1% for the week as it rose by the most since March.

Across the Atlantic, European shares had its best weekly performance in nearly eight months on Friday, mainly driven by anticipation of smaller rate hikes by the Fed, as well as easing COVID-19 restrictions in China. The broad benchmark STOXX 50 rose 0.57% to close at 3,890 points last week.

In Asia, performances of the regional markets are mixed on Monday morning, with both the ASX 200 and Nikkei 225 indices fell marginally before the mid-day trading break, while Chinese equities gained notably, due to the release of new policies to support the indebted property sector in mainland China. HK’s Hang Seng index advanced over 2.5% shortly after the opening of the afternoon trading sessions.

Price of Brent crude is fluctuating in a range bound market in the recent weeks, since it has failed to break above $100 per barrel. Gold price had the biggest week in 30 months as the price of dollar depreciated, currently trading at $1,760.6 per ounce. Meanwhile, the Chinese yuan led gains across Asian currencies today on optimism over the easing of its strict zero-COVID measures, as the currency jumped 1% to 7.0375 against the dollar.

Figure 1 (Source: IS Prime) BTCUSD daily: Bitcoin price continue to plummet as investors withdrawing funds from exchanges at a rate not seen since April 2021, as the FTX incident continue to ravage the crypto markets.

Headliner to Review

• The September UK GDP fell by 0.6%, worse than the expected figure of a drop of 0.4% as the extra bank holiday (Queen’s funeral) has somewhat added to the month’s GDP hit.
• The Preliminary UoM Consumer Sentiment index fell to 54.7 in November, versus 59.5 from last month as buying conditions for durables dropped the most due to high interest rates as well as persistent high prices.

Headliner to Watch

• Newest monthly PPI figure is due to print across the U.S. on Tuesday, looking to hike further by 0.5%.
• The G20 Leaders Summit is looking to kick start in Indonesia on tomorrow, focusing on the theme “Recover Together, Recover Stronger”.

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Authors:
Kerry Man