Market Commentary – November 30, 2021

Kevin Jock

30th November 2021

U.S. equity markets have recovered somewhat from Friday’s massive selloff as fears eased about the impact the new omicron strain of COVID-19 might have on the economic recovery. The S&P 500 and Nasdaq are up more than 1%, while the Dow has gained more than 200 points. Moderna is the top-performing stock in the S&P 500 for a second straight day after the vaccine maker said a shot to fight the omicron variant could be ready early next year.

European shares rose on Monday after their worst selloff in more than a year, with the Euro STOXX 50 index gained 0.5% and the London’s FTSE 100 jumped 0.9%, as investors also betting the Bank of England may be forced to rethink monetary policy tightening next month.

Elsewhere in Asia, Australian shares gained 1% on Tuesday, recovering from sharp losses in the two prior sessions with banks and miners boosting the benchmark index to its best day since early October. While HK’s Hang Seng Index continue to fall following yesterday’s drop, down by 1.09% at today’s mid-day close as the omicron strain fueled worries about the outlook of border reopening and economic growth.

Brent crude picked up over 1% to $74.12 a barrel, having lost more than 10% on Friday in its largest fall since April 2020. Gold was slightly up on Tuesday morning in Asia, to $1788.9, while the euro fell 0.3% against the dollar to $1.128 after nations across the EU issued travel restrictions.

image_2021_11_30T05_13_27_506Z

Figure 1 (Source: IS Prime) USDHKD Daily : For the first time since December 2019, USDHKD approaches 7.80, the mid-point of the currency band as outflows accelerate.

Headliner to Review

  • U.S. pending home sales jumped 7.5% from September, as buyers came roaring back to the housing market in October, even as mortgage rates rose. Such solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.

Headliner to Watch

  • U.S. ADP Non-Farm Employment Change is expected to be 525K, compared to 571K from the previous month.
  • The U.S. ISM Manufacturing PMI is also due to release on Wednesday, forecasted to reach 61.3.

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Authors:
Antony Tan
Kerry Man