Market Commentary – September 16, 2022

Kevin Jock

16th September 2022

Wall Street stocks dropped on Thursday after FedEx withdrew its financial forecast and made investors worried about a slowing global economy. Both the S&P 500 and the Nasdaq indices dipped over 1%, with shares of all the FAAMG firms are lower by more than 1% as well.

European shares gave up earlier gains to finished lower on Thursday, led by losses from both the energy and tech sectors. Both the CAC 40 and DAX indices declined by 1.04% and 0.55% respectively. Markets continue to remain volatile as both the bulls and the bears are fighting on every newly released data & news, with the geopolitical front made the overall situation even more complicated.

Elsewhere in Asia, all the major regional indices slid on Friday morning, as both Japan’s Nikkei 225 and HK’s Hang Seng indices dropped over 1%. Meanwhile, the Chinese, Russian and Mongolian presidents all met in Uzbekistan on Thursday, with Putin acknowledging the Chinese concerns about the war in Ukraine.

Oil price extended losses on demand related concerns, which also send shares of fossil fuel producers lower. Likewise, price of gold is set for steep weekly losses as higher expectations of sharper rate hike continue to dent the metal markets, with bullion fell by $35 yesterday, to the low point since May 2020. On the other hand, the lira continues to depreciate against the dollar in a step-by-step basis, looking to achieve a new low above 18.33 since December 2021.

Bitcoin chart (2022.9.16)

Figure 1 (Source: IS Prime) Bitcoin daily: Bitcoin price remain choppy throughout the week as higher rate expectations devastated its price to a certain extent, however, it is still remain above the key support level.

Headliner to Review

  • Australian employment growth continues as it added 33.5K jobs, pretty much in line with expectations. However, its unemployment rate ticked up slightly to 3.5%, which may encourage the RBA to slow to a 0.25% rate hike at its next meeting.
  • In U.S. retail sales unexpectedly rose in August by 0.3%, with motor vehicles and parts dealers posted the biggest gains.

Headliner to Watch

  • RBA is expected to release the meeting minutes of their monetary policy by next Tuesday.

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Kerry Man