Market Commentary – September 12, 2022

Kevin Jock

12th September 2022

U.S. stocks advanced on Friday, with the major stock indices recorded their first weekly gains since mid-August, as investors seize the opportunities to enter the oversold market. The blue-chip S&P 500 indices rose 1.53%, while the Nasdaq indices hiked over 2%. Traders now awaits the August CPI report for any signs that inflation may be easing.

Across the Atlantic, European equities finished up on Friday, marked their first weekly rise since early August. Bank stocks are the highlights on the day as it jumped 3.2% to mark their biggest gains in almost two months. On the other hand, Ukrainian armies has made noticeable advances near Kharkiv which made the Russian military forced to abandon some of its strongholds in the region.

In Asia, both the Australia’s ASX 200 and Japan’s Nikkei 225 indices made cautious gains on Monday morning open, currently up by 0.75% and 1.27% respectively. Trading sessions in both Mainland China and HK are closed due to the Mid-Autumn Festival.

In terms of oil, WTI crude price dropped on Monday on concerns of U.S.-led price caps on Russian crude exports. Gold price inched marginally higher from last week as the dollar depreciated from the recent highs, currently trading at $1,717.55 per ounce. Meanwhile, the Japanese Yen is closer to a potential market intervention as the top officials have met to discuss the currency’s unusual weaknesses.

Hang Seng Index Chart (2022.9.12)

Figure 1 (Source: IS Prime) Hang Seng Index daily: HK’s blue-chip index has reached a low since March 2022, however, a major comeback on last Friday seems eased off such concerns.

Headliner to Review

  • China reported lower than expected inflation as its CPI figure for the month of August rose by 2.5% only, compared to 2.7% from the previous month. However, food inflation stayed firm due to the jump of pork prices.
  • In Canada, 39.7K jobs are lost in August, with unemployment rate ticked up to 5.4% compared to 4.9% from the previous month, which in turn reinforced economist expectations for recession.

Headliner to Watch

  • The newest month-to-month CPI figure is expected to print in the U.S. on Tuesday, forecasted to fall by 0.1% and it would be the first decline since May 2020 should it realize.
  • Germany will also release its final CPI reading, expected to remain in line with the previous month at 0.3%.

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Kerry Man