Market Commentary – October 27, 2021

Kevin Jock

28th October 2021

Building on Monday gains, Wall Street inched higher on Tuesday by sessions to post fresh record highs off the back of strong corporate earnings. Both Microsoft and Google parent Alphabet smashed earnings expectations with an $110bn revenue haul. The S&P500 marginally eked ahead of Dow Jones recording 0.18% higher for the day whilst the latter ended flat.

European benchmarks pursued similar records to hit a 2-month high yesterday but still minutely below record levels. Optimism was rife for the remainder of earning seasons as UBS posted its best quarterly profit since 2015, aided by robust trading activity. The FTSE 100, CAC 40 and DAX all ascended by 0.76%, 0.8% and 1.01% respectively.

In Asia, Australian shares erased early gains to edge lower on Wednesday, hit by losses in mining and gold stocks as commodity prices came under pressure The S&P200 set to snap a five-session rally to settle flat. Meanwhile, China stocks fell as well, led by coal firms after Beijing’s latest move to address skyrocketing coal prices. The Hang Seng Index dropped 1.5% to 25,642.01 during the mid-session, as tech giants and healthcare firms listed in HK underperformed.

Crude oil was steady today after a report from the American Petroleum Institute showed a significant decline in stockpiles at the Cushing, Oklahoma storage hub, with the WTI trading at $84.82 a barrel. The Australian Dollar rose immediately after the Australian CPI numbers in yesterday, reaching a high of 0.75254 against the Dollar. While gold price fell on easing concerns about high inflation, which dented bullion’s safe-haven appeal.


Figure 1 (Source: IS Prime) IDX.US.100 Daily : Posting all-time highs as the tech benchmark recovers losses from September.

Headliner to Review

  • The US Conference Board Consumer Confidence Index increased in October, following declines in the previous three months. The Index now stands at 113.8, up from 109.8 in September. The proportion of consumers planning to purchase homes, automobiles and major appliances all increased which is a sign that consumer spending will continue to support economic growth through the final months of 2021.
  • The Australian CPI rose 0.8% this quarter, in line with the market forecasts. The most significant price rise was for new housing purchase by owner-occupiers and automotive fuel.

Headliner to Watch

  • This week’s incoming ECB meeting is set to prepare the grounds for the big, decision-rich, meeting in December, with the expectation of retaining the current course of monetary policy.
  • US third quarter GDP is scheduled for release on Thursday, with the market forecast of an expansion by 2.6%.

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Antony Tan
Kerry Man