Market Commentary – October 24, 2022

Kevin Jock

24th October 2022

The U.S. stock markets closed higher after a volatile week of trading last week. Both the S&P 500 and Nasdaq indices were up by 2.3% on Friday, which brought them to a rise of 4.7% and 5.2% on a weekly basis. Such advance is due to investors digesting the positive news from the Fed that they might slow the pace of interest rate rises.

Across the Atlantic, European shares fell on Friday, as the reported earnings are bleak from a vast number of companies including Adidas, which adds worries about a recession. The broad benchmark STOXX 50 dropped 0.46% on the day, while the French CAC 40 dipped 0.85%.

Elsewhere in Asia, the performance of the regional indices is mixed, with both the ASX 200 and Japan’s Nikkei 225 on the rise, while HK’s Hang Seng index opened sharply lower today, on fears that Xi Jinping has too much power after the membership line-up, currently the indices is trading at around 15,512 points.

In terms of commodities, price of Brent crude remained steady on Monday morning on expectations of tight supply ahead of EU sanctions on Russian oil. Bitcoin prices continue to trade in a narrow range at $19,410, while bullion still struggle to crawl out the hole since a month ago, currently at $1,655.37 per ounce.

USDJPY chart (2022.10.24)

Figure 1 (Source: IS Prime) USDJPY daily: The Japanese yen fluctuated dramatically in early Monday trading with the suspicion that the local government have intervened the currency market as it made a 4 yen jump on the day. However, the authorities again declined to confirm but the price action strongly suggested they had.

Headliner to Review

  • UK retail sales volume dropped 1.4% from August, much worse than the forecasted figure of a decline of 0.5% as consumers have been cutting their spending with inflation hitting 10%.
  • The Canadian retail sales figure increased 0.7% in August, led by sales in food and beverage stores, as well as motor vehicle sales.

Headliner to Watch

  • We will see the release of German ifo Business Climate index on Tuesday, expected to decline slightly to 83.4.
  • The U.S. CB consumer confidence index is also looking to print tomorrow, expected to be 105.7.

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Kerry Man