Market Commentary – August 26, 2022

Kevin Jock

26th August 2022

Wall Street stocks closed high on Thursday, fuelled by gains in Amazon and other tech-related shares as investors now turned their attentions to the Jackson Hole conference. The blue-chip S&P 500 rose 1.41%, while the tech-heavy Nasdaq indices gained 1.67%. Citigroup climbed 2.1% as they have planned to close its consumer and commercial banking businesses in Russia.

Across the Atlantic, European shares climbed slightly on the day, with the broad benchmark STOXX 50 advanced 0.19%. Germany’s DAX rose 0.39% as data showed its economy expanded 0.1% in the second quarter which beats expectations. However, overall gains are capped by concerns over a possible recession caused by energy crisis.

In Asia, regional equities are up on Friday morning, boosted by news of possible progress between U.S. and China as Beijing would allow American accounting regulators to travel to HK to inspect audit records of U.S. listed Chinese firms. China’s blue-chip CSI 300 index rose 0.26%, while HK’s Hang Seng index climbed 0.7% to 20,106.37 points.

In terms of commodities, oil price edged up on Friday on signs of improving demand, however, gains are limited as the markets now awaits clues from the Fed chairman’s speech at the annual conference. In contrast, price of gold dipped slightly on the day to $1,755.54 per ounce as dollar steadies ahead of the symposium.

Hang Seng Index (2022.8.26)

Figure 1 (Source: IS Prime) Hang Seng Index daily: The Hang Seng Index reached a three-month low on 24th August but turned it around yesterday after China announced another round of stimulus measures to bolster the economy.

Headliner to Review

  • U.S. second quarter GDP figure came out to be -0.6%, the contraction is less than previously expected at -0.7%. However, it is considered that the U.S. economy is in recession as the GDP figures showed two consecutive quarters of decline.

Headliner to Watch

  • We will see the release of monthly retail sales figures across both Australia and Germany in next Monday, forecasted to be 0.2% and -1.6% respectively.

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Authors:
Kerry Man