Market Commentary – November 10, 2021

Kevin Jock

10th November 2021

US stock markets closed lower on Tuesday, snapping an eight-day winning streak as Tesla shares dropped and investor took a cautious approach ahead of a round of important data on inflation. The S&P 500 index closed down 0.35%, while Nasdaq was 0.6% lower at the closing bell. Share price of Tesla declined 12% on Tuesday, taking their two-day drop to more than 16%. PayPal shares also dropped over 10% on a weak earnings report.

European stocks retreated from record highs as well, although strong corporate earnings and hopes of a recovery kept losses limited as investors awaited further economic data due this week. Euro STOXX 50 slid slightly by 0.18%, while London’s FTSE 100 dropped 0.36%. Both CAC 40 and DAX remained nearly flat.

In Asia, Chinese stocks fell on Wednesday after data showed factory gate prices rose at the fastest pace in 26 years last month, reducing the chances of a policy rate cut by the central bank in the near term. In HK, consumer staples and financials lost 2.5% and 1.9% respectively, dragging down the Hang Seng Index. Property developer Fantasia Holdings Group slumped over 35% after it said there was no guarantee it would be able to meet its financial obligations given the liquidity issue.

Oil prices rose on Wednesday, extending strong gains in the previous session, after industry data showed US crude stocks unexpectedly fell last week just as near-term travel demand picked up with COVID-19 pandemic curbs easing, with Brent crude currently trading at $85.54 as of noon. Gold price rose slightly in yesterday and closed at $1831.69. While EURUSD pair move sidelined at 1.15928.

image_2021_11_10T06_51_59_440Z

Figure 1 (Source: IS Prime) IDX.FR.40 Daily : The French CAC40 briefly hit new highs again after exuberant optimism.

Headliner to Review

  • The ZEW Indicator of Economic Sentiment for Germany increased in the current November 2021 survey, climbing 9.4 points to a new reading of 31.7 points. This is the first time since May that the indicator has recorded a rise.
  • The US PPI rose 0.6% in October, translating into an 8.6% increase year over year. Such reading is in line with market estimates and indicates that inflation pressures are continuing to burden the US economy. Elevated demand for goods over services again led the inflation story, with the price rises for final demand goods accounting for more than 60% of the index’s increase.

Headliner to Watch

  • Australia is due to release its labour force statistics on Thursday, with employment likely to increase 50K in October following the reopening of the nation’s east coast from virus-induced lockdowns. The jobless rate probably rose to 4.8% as Australians resumed hunting for work, swelling the labor force.

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Authors:
Antony Tan
Kerry Man