Market Commentary - June 27, 2022

U.S. equities posted big gains on Friday and registering their first weekly gains this month. All the major indices advanced significantly, with both the S&P 500 and Nasdaq indices hiked over 3% for the day, 6.4% and 7.5% respectively on a weekly basis. Investors are now believing the Fed might slow down their aggressive policy moves given the recent lackluster release of major economic data.

European stocks jumped on Friday to finish the week in positive territory as well. France’s CAC 40 index rose over 3.23%, while the broad benchmark indices STOXX 50 closed up by 2.82%. In Eastern Europe, Russia fired missiles to Kyiv on early Sunday morning, which hit residential buildings and injured a dozen citizens shortly before the commence of the G7 meeting in Germany.

Across Asia, local markets are in an upbeat mood on Monday morning as all of the major indices are up by over 1%. Japan’s Nikkei 225 index rose 1.58%, while HK’s Hang Seng Index advanced over 2.1% over 22,000 points. Meanwhile, it is confirmed that the Chinese president Xi Jinping will make his first visit outside mainland China for the HK ceremony on 1st July 2022.

Price of Brent crude roses on Monday morning to $112.45 a barrel, as investors are seeking for more clues from the G7 meeting in which the leaders of these developed nations are looking to hurt Russia with price cap on oil exports. Gold price went up to $1,835.87 on Monday, while bitcoin price staying above $21K.

HK50 charts (2022.6.27)

Figure 1 (Source: IS Prime) Hang Seng Index daily: HK’s blue-chip indices is on fire in the recent days, driven by the underlying tech stocks and to see whether it could stabilize at the 22,000 points.

Headliner to Review

  • The German ifo Business Climate index came out to be 92.3 points in June, down from 93 points in May as expectations becomes more pessimistic due to the threat of gas shortages.

Headliner to Watch

  • The U.S. CB consumer confidence index is expected to be 100, further decrease from 106.4 in May.
  • U.S. Richmond Manufacturing Index is forecasted to deteriorate from -9 in last month to -11 as the newest release.

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Authors:
Antony Tan
Kerry Man