Market Commentary – August 19, 2022

Kevin Jock

19th August 2022

U.S. equities advanced marginally on Thursday as investors are reassessing the Fed minutes to determine the pace of interest rate increase. The Dow ended the day flat, while the Nasdaq indices rose 0.21%. Cisco’s stock gained 5.8% on the day to become the biggest winner as its first quarter sales forecast exceeded expectations.

European stocks fared better on Thursday as well, boosted by oil and gas stocks following a period of weakness in crude prices, though its gains are capped on inflation data as consumer prices rose to 8.9% year-on-year. Both the FTSE and STOXX 50 hiked 0.35% and 0.57% respectively.

The performance of the Asian stocks is monotonous on Friday as practically all the major markets remain pretty much unchanged before the trading break. HK’s Hang Seng Index seems to be the only star as it advanced 0.45%. Meanwhile, China has boosted coal usage as extreme heat wave triggered power shortages across various provinces.

In terms of commodities, U.S. WTI crude are back above $90 per barrel as its inventories dropped more than expected last week. Gold prices continue to fall and looking to end the week lower, currently at $1,754.38 per ounce, while EUR/USD declined to 1.00802 as of today.

USDTRY chart (2022.8.19)

Figure 1 (Source: IS Prime) USD/TRY daily: The lira continues to depreciate against the greenback as it broke through 18, after the Turkish central bank surprised the market with a 100bps interest rate cut.

Headliner to Review

  • The Australian jobs report turns out to be much worse than expected as the report saw a loss of 40.9k jobs in July, compared to the forecasted figure of 26.5K job creation.
  • Manufacturing activity in the Philadelphia region jumped unexpectedly to 6.2 in August, topping all estimates, from -12.3 the month before.

Headliner to Watch

  • We will see the release of both Manufacturing and Services PMI across various developed nations in next week, including Australia, Japan, France, Germany, Eurozone, UK and the U.S.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice.

Kerry Man