Market Commentary – December 14, 2021

Kevin Jock

14th December 2021

Global stocks slid on Monday, with investors taking profits ahead of a busy week of central bank meetings that is expected to include further measures to combat high rates of inflation. Wall Street’s S&P 500 index fell 0.91% from Friday’s record high, while Nasdaq index dropped 1.39%. However, drug companies including Pfizer and Moderna, are leading the gainers. Pfizer shares are getting a boost from its purchase of Arena Pharmaceuticals.

The declines in the U.S. followed similar drops in European markets, with the Europe-wide STOXX 50 index fell 0.38% on Monday, while London’s FTSE 100 and CAC 40 slid 0.83% and 0.7% respectively. Travel stocks are among one of the biggest losers as it dropped 2.6% on risks of tougher movement restrictions, after the UK reported its first death from the Omicron variant.

Elsewhere in Asia, Australian shares fell on Tuesday morning, with tech stocks tracked their U.S. peers lower. HK’s Hang Seng Index dropped too, by 1.26% to 23,653.16 points before the mid-day close, mainly dragged by the shares from real-estate and Internet sectors.

Oil prices fell on Tuesday because investor worried about demand after new restrictions were imposed in Europe and Asia, with the price of Brent crude eased slightly to $74.2 a barrel. Bitcoin price has also dropped in recent days, currently trading at around $46,800. EUR/USD is weighed down by the prospects of the EU becoming the center of the new COVID-19 variant, trading at around 1.1283 at yesterday’s market close.

image_2021_12_14T05_41_28_751Z

Figure 1 (Source: IS Prime) IDX.UK.100 Daily : Despite continuous set ups from virus resurgences, inflationary pressures and social distancing restrictions, the London FTSE100 has been rising steadily over the course of the year 2021.

Headliner to Review

  • The G7 meetings are attended by finance ministers and central bankers from 7 industrialized nations, in which they have pledged greater cooperation to fix global supply chain issues that have caused shortages and led to a surge in inflation.

Headliner to Watch

  • CPI numbers from the UK expected to increase to 4.8%, from 4.2% in the previous month.
  • Core retail sales figures in the U.S. is forecasted to decelerate from 1.7% to 0.9%.

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Authors:
Antony Tan
Kerry Man