07 Nov

The RBA expectedly raised the rate by 0.25%. OPEC+ countries will maintain crude oil production cuts until the end of the year

November 7, 2023

By JustMarkets

At Monday’s stock market close, the Dow Jones Index (US30) added 0.10%, while the S&P 500 Index (US500) increased by 0.18%. The NASDAQ Technology Index (US100) closed positive by 0.30% on Monday. Stocks rose on Monday on the back of positive developments from last Friday, when a weaker-than-expected October US jobs report and October ISM services report showed a slowing economy that could keep the Federal Reserve from raising interest rates and even start lowering them by the middle of next year.

On Monday, optimistic comments from Fed Vice Chair Brainard were favorable for stocks when she said the economy is performing exceptionally well and is near the point of sustained growth, with most forecasters dismissing the issue of recession. Currently, markets are pricing in a 10% probability of a 25 bps rate hike at the next FOMC meeting on December 12-13 and an 18% probability of a 25 bps rate hike at the January 30-31, 2024 FOMC meeting.

Booking Holdings (BKNG) shares closed higher by more than 4% after D.A. Davidson upgraded the stock from Neutral to Buy with a price target of $2,400. Airbnb (ABNB) shares were down more than 3% yesterday after Italy’s financial police confiscated €779 million ($835 million) from the company due to failure to pay a portion of taxes.

Growth in Canadian economic activity accelerated slightly in October, while a measure of prices fell to its lowest level in six months. The seasonally adjusted index rose to 53.4 from 53.1 in September. It was the third consecutive month the index exceeded the 50 threshold, indicating the sector is expanding.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) decreased by 0.35%, France’s CAC 40 (FR40) fell by 0.48% yesterday, Spain’s IBEX 35 (ES35) lost 0.56% and the UK’s FTSE 100 (UK100) closed around its opening price.

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According to a survey released on Tuesday, the pace of growth in UK consumer spending last month was the slowest in more than a year, reflecting concerns about the cost of living in the run-up to Christmas. The Bank of England raised interest rates for 14 consecutive meetings until August this year. Last week, it said it planned to keep them at a 15-year high to keep inflation down, although it said the economy was stagnant and so far, the effect of the rate hikes had only been half felt.

Crude oil and gasoline prices closed moderately higher on Monday after Saudi Arabia and Russia confirmed they would maintain crude production cuts through the end of the year. The 23-nation OPEC+ coalition will meet again on November 26 to review oil production policy for 2024.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) jumped by 2.37% on Monday, China’s FTSE China A50 (CHA50) added 0.75%, Hong Kong’s Hang Seng (HK50) was up by 1.71% on the day, and Australia’s ASX 200 (AU200) was positive by 0.28% on Monday.

The Reserve Bank of Australia (RBA) expectedly to raise the interest rate by 0.25%. But the Australian dollar fell more than 0.8% as the rate hike was accompanied by softening language on the need for further increases. The RBA said in a statement that the recent rise in inflation is not material to an increase in the inflation outlook, with the impact of past rate hikes not yet fully reflected in the real economy, so there are reasons not to raise rates further.

Japanese household spending fell by 2.8% year-on-year in September, marking the seventh consecutive monthly decline, as households cut spending on food and other goods amid rising prices with real wages continuing to fall.

Chinese exports contracted more than expected in October amid deteriorating overseas demand, while an unexpected rise in imports caused China’s trade surplus to shrink to its lowest level in 17 months. The trade data showed continued headwinds for the Chinese economy, especially amid deteriorating economic conditions in China’s largest trading countries − Europe and the United States.

S&P 500 (F)(US500) 4,365.98 +7.64 (+0.18%)

Dow Jones (US30) 34,095.86 +34.54 (+0.10%)

DAX (DE40)  15,135.97 −53.28 (−0.35%)

FTSE 100 (UK100) 7,417.76 +0.03 (+0.01%)

USD Index  105.29 +0.27 (+0.26%)

News feed for 2023.11.07:
  • – China Trade Balance (m/m) at 05:00 (GMT+2);
  • – Australia RBA Interest Rate Decision at 05:30 (GMT+2);
  • – Australia RBA Rate Statement at 05:30 (GMT+2);
  • – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
  • – German Industrial Production (m/m) at 09:00 (GMT+2);
  • – Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
  • – US Trade Balance (m/m) at 15:30 (GMT+2);
  • – Canada Trade Balance (m/m) at 15:30 (GMT+2);
  • – US FOMC Member Williams Speaks at 19:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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