Market Commentary – January 21, 2022

Kevin Jock

21st January 2022

Wall Street’s primary indexes ended much lower on Thursday, with both the Nasdaq and S&P 500 closed down by more than 1%. Shares of Peloton Interactive dropped sharply by 24% after reports that the exercise bike maker is pausing production of its connected fitness.

European shares ended higher with travel stocks leading gains as Ryanair expressed confidence in a recovery this year. The EURO STOXX 50 index gained 0.7%, while the travel stocks sector rose 2.9% as airline shares jumped.

In Asia, nearly all of the major markets fell, after U.S. stocks took a knock overnight, hurt by weaker than expected economic and earnings data. Both the broad benchmark indexes ASX 200 and Nikkei 225 dropped by 1.9% and 1.4% respectively during the Asian morning. While HK’s Hang Seng index reversed early morning gains to trade in the red territory, down by 0.7%.

Oil prices plunged on Friday, after rising to seven-year highs this week, with Brent crude dropped to $85.76 during the Asian morning session. Gold prices are muted on Friday and is on course for a second consecutive weekly gains. Both the Australian and New Zealand dollars lost ground as the slide in global stock markets undermined risk assets, with the Aussie lapsed to $0.7188.

image_2022_01_21T04_28_40_471Z

Figure 1 (Source: IS Prime) CC.BTC.USD Daily : Bitcoin tumbles below 40K following Russia’s ban on use and mining of cryptocurrencies.

Headliner to Review

  • Australia has recorded a jobs boom following the most recent set of lockdowns, with unemployment plunging to just 4.2% in December 2021, the largest dip since the global financial crisis. Recovery in New South Wales and Victoria continued to have a large influence on the national figures, with employment in these two states increasing by 32K and 25K people.
  • U.S. weekly unemployment claims rose by 55K to 286K, well above economists’ estimates and the most since the week of Oct 16, as the spread of the omicron variant may be affecting the job market.

Headliner to Watch

  • A series of Flash Services and Manufacturing PMI index are due to release on next Monday, across various countries including France, Germany, UK and the U.S.

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Authors:
Antony Tan
Kerry Man