Market Commentary – November 19, 2021

Kevin Jock

19th November 2021

Following a lackluster session on Wednesday, both the S&P 500 and Nasdaq managed to settle at record highs on upbeat tech earnings, outweighing hawkish remarks from Federal Policymakers. Both indices supported by Nvidia. The chip-maker jumped 8.2% after beating quarterly estimates and forecasting strong fourth-quarter revenue.

Optimism in the US failed to follow through to Europe with indices weighed down by weakness in commodity related stocks amid declining oil and metal prices, breaking a record-breaking six-day rally fueled by strong earnings. The Euro STOXX 50 index declined by 0.39% to close at 4,383.70 points, while both CAC 40 and DAX indices all touching record highs earlier in the session but giving up those gains by the close.

Chinese shares edged higher Friday open, helped by logistics stocks, with the blue-chip CSI 300 index gained 0.18% to 4,846.29 points by the end of the morning session. However, in HK, the benchmark Hang Seng Index dropped 1.8% to 24,874.44 points, dragged by the e-commerce giant Alibaba. Shares of Alibaba slid by 10.38% to HK$139.8 after the company forecast annual revenue to grow at its slowest pace since its 2014 stock market debut as second-quarter results missed expectations due to slowing consumption and regulatory crackdown.

Brent crude rose slightly to settle at $81.322 by yesterday’s market close. Meanwhile, Bitcoins’ selloff continues with the price now below $58K. Contagion further affected other cryptocurrencies. Elsewhere, Turkey slashed interest rates on Thursday, sending the lira tumbling as much as 6% to a new record low, heightening concerns President Erdogan’s fixation on low borrowing costs will worsen an already acute inflation curve.

image_2021_11_19T06_57_55_489Z

Figure 1 (Source: IS Prime) USDTRY Daily : Turkish lira tumbles further following rate cuts. The 30% depreciation this year is on par with the 2018 currency crisis.

Headliner to Review

  • The US Philly Fed Manufacturing Index increased 15 points to 39 in November, its highest reading since April, which indicates that the manufacturing activity in the region continued to grow as the survey’s current indicators for general activity, shipments, and new orders all rose from October’s readings.
  • Newest US unemployment insurance weekly claims came out to be 268K, a decrease of 1K from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256K.

Headliner to Watch

  • Consumer confidence index in Euro area is due to release in next Monday, with the previous month’s figure down by 5 points.

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Authors:
Antony Tan
Kerry Man