Market Commentary – April 28, 2022

Kevin Jock

29th April 2022

Wall Street stocks recovered slightly from Tuesday’s sell-off as investors now focuses on positive corporate earnings report. Both the Dow and S&P 500 indices rose 0.2%, while the Nasdaq indices remain almost flat as of yesterday’s market close. Tech giant Microsoft beat analysts’ expectations for revenue and earnings in the latest quarter, with its stock price advanced 4.8% which has helped alleviated investor sentiment after the huge sell-off two days ago. Share price of Boeing has dipped significantly by 7.53% as their earnings have missed expectations due to pandemic related lockdowns which has adversely affected the airline travel industries.

European equities have also regained some losses from the large declines two days ago, as its broad benchmark indices STOXX 50 closed up by 0.36%. Russia’s state-owned energy group Gazprom cut off gas supply to Poland and Bulgaria because they refuse to pay the fees in roubles. Such drastic action has made the European gas prices soared by 24%. However, a few European energy corporations might compromise to Russia’s requests of paying the bills in roubles, but it is yet to be confirmed.

In Asia, stock indices across major markets are up by various degrees. Japan’s Nikkei 225 index rose on Thursday by 0.61% with the tech stocks led the gains, although investors remain cautious ahead of the BoJ policy meeting. HK’s Hang Seng Index climbed over 1% today to follow up with yesterday’s gains right before the mid-day break, while China’s blue-chip CSI 300 index increased marginally by 0.37%. Meanwhile, Bill Hwang, the founder of the family office Archegos, were charged with criminal violations resulted from the firm’s $5.5bn collapse last year. He could face up to 380 years of imprisonment provided that all charges are convicted.

Oil price edged slightly lower on Thursday morning as mass COVID testing begins in China, at the city of Hangzhou, where brent crude price dropped to $103.75 per barrel. Gold price has dropped to two-month low as the dollar rallied on expectations of aggressive policy tightening by the Fed, in which the bullion has now broke through $1,900 to trade at $1,878.34 per ounce. Bitcoin is looking to bounce back from the previous low of $37.7K, as it is now approaching the $40K level once again.

image_2022_04_28T05_15_00_716Z (1)

Figure 1 (Source: IS Prime) EUR/USD daily : Euro sinks to lowest value since April 2017. Geopolitical turmoil alongside weaker economic prospects had left demand for currency less palatable.

Headliner to Review

  • Q1 2022 CPI figure came out to be 2.1% in Australia, faster than the 1.7% expected by the market consensus. Its year-over-year figure coming in at 5.1% from 3.5%. Such acceleration increases the likelihood of a rate hike by the Reserve Bank of Australia when they meet on next week.
  • Consumer confidence in Germany has reached a historic low, as the newly released GfK consumer climate index turns out to be -26.5 points in May in terms of forecast. The downbeat sentiment is still driven by the extensive sanctions against Russia which have caused consumers’ income expectations to slip.

Headliner to Watch

  • A series of GDP figures are expected to announce across various developed nations, including France, Spain, Italy, Germany and Canada.
  • The U.S. Core PCE Price Index is forecasted to rise marginally by 0.3%, month-to-month.

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Authors:
Antony Tan
Kerry Man