Market Commentary – August 24, 2021

Kevin Jock

24th August 2021

Wall street rallied on Monday, with all the major indices were solidly higher in the session with Nasdaq outperforming again and reached an all-time closing high, as sentiment was boosted by full FDA approval of a COVID-19 vaccine developed by Pfizer and BioNTech. The tech-heavy index jumped 1.55% to 14,942, marking a third day in the green and a second straight session with an advance of more than 1%.

Elsewhere in Asia, all the primary market indices were up throughout today’s morning sessions, with the Hang Seng Tech Index rocketed by 7.06% during the closing session, ignited by JD.com’s outstanding earnings and defied Beijing’s regulatory crackdown among the tech sectors. The Shanghai Composite Index was up by 1.07% after the PBOC pledged to stabilize the supply of credit and increase monetary support for small businesses and the economy. Nikkei 225 was up by 0.87%.

In Europe, the CAC40 closed up 0.9%, the region wide StoXX 600 index ended the day up 0.7%, and both Frankfurt’s Dax and UK’s FTSE 100 were up 0.3%.

Oil and other commodity prices bounced back following last week’s sell-off. Brent crude rose 5.5% to settle at $68.75 a barrel, as the falling Covid-19 cases in China act as a signal in which social restrictions in the world’s largest consumer of commodities may soon ease.

nasdaq-Aug-24-2021-11-15-55-53-AM

Figure 1 (Source: IS Prime) Nasdaq Daily : Nasdaq unrelenting as Tech rallies to all-time highs again after Pfizer obtains full FDA approval.

Headliner to Review

  • The newly released German Flash Services PMI figures are pretty much in line compared to the last month, at 61.5, which illustrates strong growth in terms of the business activities across Germany’s private sector despite further constraints on manufacturing production.
  • The EU PMI figures also aligns with expectations, at 59.7. Business activity continued to grow and the rate of expansion cooling only slightly despite widespread supply chain delays. Demand again outstripped supply and hiring remained the strongest for 21 years as firms boosted capacity to meet rising demand.

Headliner to Watch

  • The US Crude Oil Inventories are due to release, with forecasts of a decline by 1.3 million barrels from the prior week.
  • German ifo Business Climate index is forecasted to be 100.2 points, down from 100.8 points in July, as business expectations are becoming less optimistic caused by supply bottlenecks and concerns over newly rising infection numbers of the pandemic.

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