Market Commentary - September 27, 2021

Stocks on Wall Street wavered on Friday as investors kept a close eye on the unfolding Evergrande crisis and digested hawkish signals from several leading central banks. The S&P 500 index ended the day 0.15% higher, after falling as much as 0.4% early in the session, while the Nasdaq ended both session and the weak flat.

European stocks slide on Friday, with the STOXX 600 closed down 0.9%. However, FTSE 100 advanced more than 1% for the week, even it declined 0.38% on Friday. Both the CAC 40 and DAX fell 0.95% and 0.72% respectively. Evergrande was due to make an $84m interest payment on an offshore bond on Thursday but creditors have not yet received any payments.
In Asia, HK’s Hang Seng index closed 1.3% lower on last Friday, taking its fall for the week to almost 3%. Hitting investor sentiment further on Friday was a move by Beijing to crack down on cryptocurrencies by declaring that all activities related to digital coins are illegal.

Brent crude price rose 1.1% on Friday to settle at $78.03 a barrel as it has rallied for 4 consecutive days already. The dollar index marginally rose by 0.2% while Bitcoin price tumbled by as much as 10% to $40,686 in roughly three hours on Friday, after the Chinese authorities reiterated their tough stance against cryptocurrency activities, including trading and mining.

Figure 1 (Source: IS Prime) Brent Crude Daily: Oil prices are ascending quite significantly in last week, approaching $80 per barrel..

Headliner to Review
  • Germans have been deciding who will be governing them for the next four years during the Federal Election on Sunday, as Angela Merkel is stepping down after 16 years in power. The exit polls said race between Social Democrats and Mrs. Merkel’s CDU is very close, with the partial count showed Social Democrats with a slender lead over the Union bloc.
  • The German ifo Business Climate index came out to be weaker than the forecasted figure of 99, with the September reading of 98.8, due to the fall of the German business morale, hit by supply chain problems that are causing a bottleneck recession for manufacturers.

Headliner to Watch

  • Statistics of the US Core Durable Goods Orders is expected to increase by 0.5%, less than the 0.8% rise from the previous month.
  • The US CB Consumer Confidence index is expected to bounce back to 115.2 when compared to the actual data from August.

 

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Authors:
Antony Tan
Kerry Man