Market Commentary – November 12, 2021

Kevin Jock

12th November 2021

US equity markets are mixed following two days of selling on concerns about rising inflation. The S&P 500 and Nasdaq are gaining, while the Dow is lower by 0.44%. Semiconductor shares are dominating the list of best performers in the S&P 500 after several governors called on Congress to pass legislation to give federal subsidies to factories that make computer chips for automobiles. Shares of electric truck maker Rivian are rising again after gaining 29% in their first day of trading yesterday, making it the seventh most valuable carmaker in the world.

European stocks ended at a record high on Thursday after relief around property developer China Evergrande benefited China-focused mining stocks, while a strong earnings season buoyed broader sentiment, with the mining sector rallying 3.7% in its best day in four months. FTSE 100, CAC 40 and DAX rose 0.6%, 0.2% and 0.1% respectively.

In Asia, Japanese shares rose on Friday, with tech stocks leading gains as investors snap up battered stocks. The Nikkei 225 rose 1.14% to 29,612.21 points before the mid-day close. Australian equities gained on Friday, breaking a four-day losing streak, propelled by mining stocks. While HK’s Hang Seng Index went up slightly during the mid-day break, by 0.22% to reach 25,302.94 points.

The price of Bitcoin tumbled from its all-time high set this week and is down 5%. While the dollar touched its strongest point against the Euro in 16-months on Thursday, after a surge in US CPI to a three-decade high revived market bets on the Fed tightening monetary policy. After a steep fall overnight, EURUSD pair dropped to $1.15, its weakest since July 2020. Gold has surged nearly 4% over the past five trading sessions to trade at $1,857.9 per ounce on Thursday.

image_2021_11_12T04_47_50_407Z (1)

Figure 1 (Source: IS Prime) USDTRY Daily : Turkish lira heads toward the 10 figure level as political gerrymandering saw numerous governors and deputy governors dismissed for their attempts to fight inflation.

Headliner to Review

  • Australia’s October labour report was pretty negative, with the 46,300 decline in total employment mainly accounted for by falling full-time jobs (-40,400), and a surge in the unemployment rate from 4.6% to 5.2%. But with reopening now underway and lockdowns being rolled back, we should see employment bounce quickly back in the coming months.
  • UK GDP is estimated to have increased by 1.3% in Quarter 3 2021, following the continued easing of COVID-19 restrictions. The largest contributors to this increase were from hospitality, arts and recreation.

Headliner to Watch

  • Both the Chinese Retail Sales figure and the US Empire State Manufacturing Index are due to release in next Monday, with their previous figures reaching 4.4% and 19.8 respectively.

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Antony Tan
Kerry Man