Market Commentary – November 8, 2021

Kevin Jock

8th November 2021

Wall Street stocks are pushing ever further into unchartered territory as new data and corporate financials show that the economy and US corporations are still rebounding from the depth of the pandemic. Last week alone, US markets rallied 2%, the best performance since June. Companies beaten down during the pandemic such as airlines, cruise operators and casinos advanced after Pfizer’s announcement on Friday that its antiviral pill successfully reduced hospitalization rates stemming from COVID-19 by 90%. Likewise, European benchmarks echoed similar sentiments with travel stocks leading the charge. Both the CAC 40 index and FTSE 100 gained 0.76% and 0.33% respectively.

In Asia, Australian shares opened flat on Monday, as heavy losses among healthcare firms, consumers and banks were partially offset by gains in energy and miners, with Stanmore Resources soaring 24% on deal to buy BHP Group’s stake in its metallurgical coal unit. On the other hand, Nikkei 225 slips slightly on Monday morning, with many investors ready to take profit near the psychological resistance at the big number of 30,000 points. In China, the MSCI A50 ETF begin to trade on Monday, which directly competes against the FTSE A50 as it adopts a more balanced approach in sector allocation.

Oil prices rose on Monday after Saudi Arabia’s state-owned oil producer Aramco raised the official selling price for its crude, suggesting demand remains strong at a time of tight supplies, with the Brent crude price up 1.4% to $84.15 a barrel. Gold had a great day on Friday, settling out the week at around $1,820. While the pound dropped on that date as BoE’s surprise decision not to raise interest rates reverberated across markets, putting the UK currency on course for its worst week since June, with Sterling fell 0.5% against the US dollar to $1.343.

image_2021_11_08T05_02_40_628Z

Figure 1 (Source: IS Prime) GBPUSD Daily : With hawkish monetary endeavors in full gear over at the Federal Reserve, the Bank of England holds off weakening demand for the pound.

Headliner to Review

  • The US added 531K non-farm jobs to the economy in October, stronger than the 455K that was forecasted. In addition, the Unemployment Rate fell to 4.6% vs 4.7% and Average Hourly earnings was +0.4% vs +0.6% last. Although such job report is decent, but there is still a sense of mild disappointment as labour supply simply isn’t returning and for companies desperate to hire this is a problem.

Headliner to Watch

  • The German ZEW Economic Sentiment index is due to release on Tuesday, expected to reach 20.3 compared to 22.3 from previous month.
  • US monthly PPI figure is forecasted to grow by 0.6%, marginally higher than 0.5% from last month.

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Authors:
Antony Tan
Kerry Man