InvestMacro

By JustMarkets

At Tuesday’s stock market close, the Dow Jones Index (US30) increased by 0.40%, while the S&P 500 Index (US500) added 0.52%. The NASDAQ Technology Index (US100) closed positive by 0.58% yesterday. All three indices hit their 2-week price highs. On Tuesday morning, stocks opened higher amid prospects of additional stimulus in China, which will favor global growth after Bloomberg reported that China is preparing for a new round of stimulus to support its economy. Stocks further extended gains after comments from FRB Atlanta President Bostic reinforced speculation that the Fed is about to take a pause in raising interest rates.

The International Monetary Fund (IMF) warned of persistent inflation and urged the world’s central banks to maintain tight policy until price pressures ease, lowering its 2024 global GDP forecast to 2.9% from July’s forecast of 3.0% and raising its 2024 global inflation forecast to 5.8% from July’s forecast of 5.2%.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) increased by 1.95%, France’s CAC 40 (FR40) gained 2.01% on Tuesday, Spain’s IBEX 35 (ES35) jumped by 2.19%, and the UK’s FTSE 100 (UK100) closed up by 1.82%. Eurozone economic news on Tuesday lent support to the euro after Italian industrial production unexpectedly rose by 0.2% m/m in August, exceeding expectations of a decrease by 0.3% m/m. ECB Governing Council spokesman Holzmann said yesterday that inflation needs to be kept under control, and supply shocks could force the ECB to raise interest rates one or two more times. This is a more hawkish stance than was previously the case.

Minutes from the Bank of England’s last monetary policy meeting showed that the UK Banking System remains strong enough to support households and businesses even if economic conditions are worse than we expect. The UK banking system has substantial capital reserves and other resources to cover potential losses or cash outflows. Participants believe that interest rates are likely to remain high for an extended period of time.

There was profit taking in crude oil after the IMF lowered its global GDP forecast for 2024. But losses in crude oil were limited by a weaker dollar and heightened fears that the conflict between Israel and Hamas could widen and disrupt crude oil supplies from the Middle East. In addition, the prospect of additional stimulus from China is supporting energy demand and oil prices.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was up by 2.43%, China’s FTSE China A50 (CHA50) decreased by 0.58%, Hong Kong’s Hang Seng (HK50) added 0.84%, and Australia’s ASX 200 (AU200) ended the day positive by 1.01%.

China is considering widening its budget deficit for 2023 as the government prepares for a new round of stimulus to help the economy reach its 5% growth target. Policymakers may issue an additional 1 trillion yuan ($137 billion) worth of government debt to finance infrastructure spending.

S&P 500 (F)(US500) 4,358.24 +22.58 (+0.52%)

Dow Jones (US30) 33,739.30 +134.65 (+0.40%)

DAX (DE40)  15,423.52 +295.41 (+1.95%)

FTSE 100 (UK100) 7,628.21 +136.00 (+1.82%)

USD Index  105.77 -0.31 (-0.29%)

• – US FOMC Member Daly Speaks at 01:00 (GMT+3);
• – German Consumer Price Index (m/m) at 09:00 (GMT+3);
• – US FOMC Member Bowman Speaks at 11:15 (GMT+3);
• – US Producer Price Index (m/m) at 15:30 (GMT+3);
• – Canada Building Permits (m/m) at 15:30 (GMT+3);
• – US FOMC Member Bostic Speaks at 19:15 (GMT+3);
• – US FOMC Meeting Minutes at 21:00 (GMT+3).

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.

By JustMarkets

As of Monday’s stock market close, the Dow Jones Index (US30) added 0.59%, while the S&P 500 Index (US500) increased by 0.63%. The NASDAQ Technology Index (US100) closed positive by 1.60% yesterday. The S&P 500 (US500) and Nasdaq 100 (US100) indices rose to 2-week highs, while the Dow Jones Industrials (US30) reached a one-week-high. Stock indices rose on Monday amid dovish comments from the Federal Reserve, suggesting that the Fed may pause its rate hike cycle. Fed Vice Chairman Jefferson said policymakers are “in a position to proceed cautiously in assessing the degree of additional policy tightening that may be necessary” as the recent rise in Treasury bond yields acts as a potential additional constraint on the economy.

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.

By George Prior

Oil prices surged by 5% following Hamas’ unexpected attack on Israel over the weekend, but investors need to avoid knee-jerk reactions, warns the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The warning from Nigel Green of deVere Group comes as global investors digest the news that the Palestinian Islamist group Hamas on Saturday launched the largest military assault on Israel in decades, killing hundreds of Israelis and triggering a wave of retaliatory Israeli air strikes on the Gaza Strip.

Heading into the third day, the death toll was 1,100, while the US said it was sending warships to the region.

The deVere CEO says: “The events in this region are now directly impacting financial markets worldwide, which, as ever in times of increased volatility, is immediately prompting some investors into selling off riskier parts of their portfolios, such as stocks and some currencies.

“Oil has a disproportionate impact on global financial markets due to its pivotal role in the world economy, its interconnectedness with various sectors, and its potential to influence broader economic conditions and investor sentiment.

“I would urge investors to avoid knee-jerk reactions to the oil price surge and geopolitical tensions that are creating the market turbulence.

“Investors are likely to profit by sitting still and not selling and then having to buy back at higher prices.”

He continues: “Indeed, savvy investors, including the likes of Warren Buffett, will likely use the volatility and lower entry points to top-up their portfolios for the long-term with high quality stocks that have robust fundamentals.”

Ensure your investment portfolio is diversified across various asset classes, such as stocks, bonds, and commodities. “Diversification is your best weapon to mitigate the risks associated with geopolitical events,” observes Nigel Green.

He also recommends that you keep a close eye on energy-related stocks and companies, as they are likely to be directly impacted by the fluctuating oil prices. Companies involved in oil production and exploration may benefit from higher prices, while industries that rely heavily on energy consumption may face challenges.

“While short-term market fluctuations can be unsettling, it’s essential to maintain a long-term perspective when making investment decisions. Historically, markets have rebounded from geopolitical crises, and a well-constructed portfolio can weather such storms,” he concludes.

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.

By JustMarkets

As of Friday’s stock market close, the Dow Jones Index (US30) increased by 0.87% (week-to-date -0.14%), while the S&P 500 Index (US500) added 1.18% (week-to-date +0.56%). The NASDAQ Technology Index (US100) closed positive 1.60% (week-to-date +1.61%) on Friday. Stock indexes rose sharply on Friday despite a strong Nonfarm Payrolls report. Stocks retreated initially Friday morning, with the Dow Jones Industrials Index falling to a 4-month low after bond yields jumped on the back of a 336,000 increase in US employment numbers. Additionally, August employment data was revised upward by 40,000 to 227,000 from the originally announced 187,000. The unemployment rate for September was unchanged at 3.8%. But a short time later, stocks returned to the upside amid a falling dollar. The US consumer credit for August unexpectedly contracted by $15.62 billion, the largest decline in 3 years and weaker than expectations for a $11.70 billion increase.

Canada’s labor market beat expectations for the third consecutive month, and wage growth accelerated. The country added 63,800 jobs in September, and the unemployment rate was 5.5%, where it has been since July. The data beat expectations for a modest gain of 20,000 jobs and an unemployment rate of 5.6%. Workers’ compensation growth rose to 5.3%, also beating expectations of 5.1% and up from 5.2% a month earlier. This is the third consecutive month of accelerating growth. The data suggests that even in the face of rising interest rates, the economy continues to expand jobs and wage growth strongly. Overnight swap traders raised bets on further policy tightening by the Bank of Canada, with another 25 basis point rate hike expected by March 2024.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) rose by 1.06% (-1.36% for the week), the French CAC 40 (FR40) gained 0.88% (-1.45% for the week), the Spanish IBEX 35 (ES35) added 0.78% (-2.31% for the week), the British FTSE 100 (UK100) closed up by 0.58% (-1.49% for the week).

ECB Executive Board spokesperson Schnabel said on Friday, “I still see upside risks to inflation, and if they materialize, further interest rate hikes may be necessary.” European Central Bank President Christine Lagarde said in an interview published Sunday that she was confident the ECB would meet its inflation target of 2% and was relatively confident about Europe’s gas reserves situation.

On Saturday, militants from the Palestinian group Hamas launched an unprecedented attack on Israel. The number of Israelis killed since the attack began totaled more than 700, and another 750 were reported missing. In response, Israel imposed a state of war for the first time since 1973. The country’s leadership enacted a special clause, “40 alef,” which means a formal declaration of war and that the army is given full freedom of action. The Hamas attack was openly welcomed by Iran and the Lebanese group Hezbollah, an ally of Iran. Western countries, led by the US, condemned the attack and declared their support for Israel. The aftermath of the outbreak of the war between Israel and Hamas was reflected in the stock markets of Middle Eastern countries on Sunday. Israel’s TA-35 stock index, calculated in Tel Aviv, ended the session down about 7%, mainly due to a drop in bank stocks. It was the sharpest market decline in three years. Analysts say the impact on the Gulf and Middle East markets depends on whether the conflict spreads. If so, it will increase uncertainty in the markets, inflation, and economic growth will take a back seat to geopolitical risk. Analysts say rising geopolitical risk could lead to the buying of assets such as gold and the US dollar and potentially boost demand for US Treasuries. The dollar, considered a safe haven in tough times, rose against the euro and pound sterling in early trading. Gold also showed the gap up.

Over the past week, Brent Crude fell about 11%, and WTI crude fell more than 8% amid concerns that continued high interest rates will lead to a slowdown in global economic growth, which in turn will affect fuel demand. On Sunday, Bahrain, Iraq, Kuwait, Oman, Oman, Saudi Arabia, and the United Arab Emirates reaffirmed their commitment to “collective and individual voluntary adjustments” in oil production levels. In other words, OPEC+ countries may resort to further supply cuts if oil prices continue to decline.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) fell by 3.45% for the week, China’s FTSE China A50 (CHA50) did not trade all week due to holidays, Hong Kong’s Hang Seng (HK50) ended the week up by 0.01%, and Australia’s ASX 200 (AU200) ended the week negative by 1.34%.

US-listed Chinese stocks rose on Friday after it was reported that spending on Chinese internet platforms during the Golden Week holiday exceeded pre-pandemic levels. As a result, shares of PDD Holdings (PDD) rose more than 7% and led the Nasdaq 100 stock price gains. JD.com (JD) and Baidu (BIDU) also rose more than 3%. In addition, shares of Alibaba Group Holding (BABA) rose more than 2%.

S&P 500 (F)(US500) 4,308.50 +50.31 (+1.18%)

Dow Jones (US30) 33,407.58 +288.01 (+0.87%)

DAX (DE40)  15,229.77 +159.55 (+1.06%)

FTSE 100 (UK100) 7,494.58 +43.04 (+0.58%)

USD Index  106.10 −0.23 (−0.22%)

• – German Industrial Production (m/m) at 09:00 (GMT+3).

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.