Market Commentary – September 30, 2022

Kevin Jock

30th September 2022

Wall Street equities ended sharply lower on Thursday, with the tech heavyweights leading the declines including Apple, in which its stock prices dipped nearly 5% due to weaker consumer demand for its products. The Nasdaq indices dropped 2.84% as it sank to near its lowest level in mid-June of 2022, while the blue-chip S&P 500 touched lows last seen in November 2020.

European shares fell on Thursday as well, as the higher-than-expected German inflation data led to fears about soaring prices and aggressive central bank moves, with both the FTSE 100 and DAX indices declined 1.77% and 1.71% respectively. On the other hand, the damage of the Baltic Sea pipelines is yet still unknown, whether it is an unlikely accident or an actual man-made attack.

In Asia Pacific, regional shares are heading for the worst month since the beginning of the pandemic, with all the major stock indices down on Friday. HK shares are likely heading for their worst quarter since 2001 as the Hang Seng index is having a landslide drop recent days, approaching 17,000 points.

In terms of commodities, oil price hiked marginally on Friday, but looking to set for a fourth straight month of losses on concerns of weaker demand. Likewise, gold price also rose slightly today as pressure from the dollar eased, currently trading at $1,663.58 per ounce.

USDCNH Daily (2022.9.30)

Figure 1 (Source: IS Prime) USDCNH daily: The depreciation of the Chinese currency is somewhat eased in the recent days, however, it is still above the key level of 7, on track for its largest annual fall since 2005, after China abandoned its dollar peg in favor of a floating exchange rate.

Headliner to Review

  • The U.S. economy contracted in the second quarter by 0.6%, which is in line with economists’ forecasts. Such declines in GDP were mainly driven by decrease in retail inventory investments and government spending.
  • Real GDP in Canada rose 0.1% in July, after a similar increase in June, with both the mining and agriculture sector grows.

Headliner to Watch

  • We are expecting to see the release of Manufacturing PMI data across various countries on next week, including Japan, Spain, Switzerland, Italy, France, Germany, eurozone, UK, Canada and the U.S.

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Authors:
Kerry Man