Market Commentary – December 2, 2021

Kevin Jock

2nd December 2021

US equities slid on Wednesday with the S&P 500 index closed 1.18% lower, erasing a gain of 1.9% earlier in the session. While both the Dow and Nasdaq indices dropped 1.34% and 1.83% respectively. Such knock to stocks came on news that the first Omicron variant had been identified in a vaccinated person in California.

European equities posted their best session in almost six months on Wednesday, as investors picked up undervalued stocks that were beaten down in the past few sessions by fears of the spread of the new virus variant. Euro STOXX50, CAC 40 and DAX indices all rose by more than 2% at the market close, with both the autos and travel stocks ascended 3.8% and 3.1% respectively.

Australian shares fell at open on Thursday, as concerns over the virus variant kept investors jittery, while Afterpay fell over 5% after postponing meeting to vote on its $29bn deal with Jack Dorsey-led Square Inc. On the other hand, HK’s Hang Seng index rose slightly by 0.23% to 23,714 points at the mid-day close. The Chinese social media firm Weibo Corp. plans to price its share at HK$272.8 each to raise $385 million in its HK secondary listing.

Brent crude is up marginally to $70.3 a barrel in Asia trading. Turkey has announced to intervening in the currency markets in an attempt to steady the tumbling lira. The announcement sparked a strong rally, with the currency strengthening to about 12.41 against the dollar, later trimming some of its gains to close at 13.24 in yesterday.

image_2021_12_02T05_51_20_457Z

Figure 1 (Source: IS Prime) SPT.CO.UK Daily : Brent crude encountered a downturn recently but has since stabilized as investors are waiting for the outcome of the OPEC+ meeting.

Headliner to Review

  • Australia’s quarterly GDP contracted by 1.9%, with unit labor costs and total employee compensation only moved slightly higher in the three months through September as many firms were shuttered and state borders sealed in the period to contain an outbreak of the delta variant.
  • US November Manufacturing PMI registered 61.1%, an increase of 0.3% from the October reading of 60.8%. This figure indicates expansion in the overall economy for the 18th month in a row after a contraction in April 2020.
  • US ADP Non-Farm Employment statistics came out to be 534K, higher than the forecast figure of 525K.

Headliner to Watch

  • US Non-Farm Payroll is due to release on Friday, expected to add 553K jobs in November compared to 531K jobs in October. While unemployment is also expected to fall to 4.5% from 4.6%.
  • The Canadian employment rate is forecasted to be 6.6%, down from 6.7% from last month.

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Authors:
Antony Tan
Kerry Man