Weekly Recap 25-29 Oct

Wall Street

The US stock market hit another round of record highs on Friday, as Wall Street appears to have overcome disappointing results from major companies to conclude its best month of the year.

The S&P 500 rose 0.19% to close at 4,605.38, the Dow Jones Industrial Average rose 0.25% to close at 35819.56, the Nasdaq Composite rose 0.33% to close at 15498.39.

The S&P500 and Nasdaq both posted their best months since November 2020.

The Nasdaq rose 7.2% in October, while the S&P 500 rose 6.9%. The Dow Jones rose 5.8%, marking its best month since March.

The S&P500 rose for the fourth consecutive week, the longest continuous period of gains since April.

Europe

European shares ended trading Friday, October 29, stable, with a jump in major financial stocks, driven by rising bond yields to offset weakness in high-yielding sectors and commodity companies that are reeling from a decline in oil and metal prices.

The European Stoxx 600 index closed with a slight increase of 0.1%. Still, it recorded a rise of 4.6% in October, making this month the best in seven months, compensating for all September losses, with promising results for companies for the third quarter, which attracted investors.

On Friday, insurance stocks were the best performers, up 0.8%, with banks and other financial stocks receiving a boost due to higher government bond yields in southern European countries with bets that the ECB will tighten monetary policy by the middle of next year.

Cash dividend-related stocks such as utilities and real estate were the worst performers today as the increase in bond yields reduced the attractiveness of their future returns.

However, in October, the utility sector was still the best performer in the Eurozone. It rose more than 8% as investors bet that the recovery would eventually come to economic activities.

Mining and energy stocks closed lower as oil prices fell from recent peaks and on fears of a drop in China’s demand for minerals.

Oil

Oil prices ended higher on Friday, October 29, and turned to recover after a decline earlier in the session, supported by expectations that the Organization of the Petroleum Exporting Countries and its allies led by Russia, OPEC+, will continue to cut production.

But the two benchmarks, Brent and Texas, ended the week lower after their prices reached their highest level in years on Monday.

The price of Brent crude rose six cents to settle at $84.38 a barrel upon settlement, while the US West Texas Intermediate crude rose 76 cents, or 0.9%, to $83.57 a barrel.

Prices have been under pressure since Wednesday after a report that US crude stocks rose by 4.3 million barrels in the latest week. Iran said talks on reviving the nuclear deal would resume at the end of November, taking it one step closer to boosting its oil exports.

Crude prices witnessed increases in 2021 as economies around the world recover from the Corona pandemic, but prices are heading for a decline this week, and Brent faces its first weekly decline in about two months.

Gold

Gold prices fell to their lowest level in more than a week on Friday, pressured by the rise in US Treasury bond yields and the strength of the dollar, as data showed that inflation remained sharp last month, turning attention again to the US Federal Reserve meeting next week.

US gold futures for December delivery fell 1.3 percent to $1,783 an ounce.

However, the general concerns related to the rise in prices kept gold and silver on the path of recording a monthly increase of about 1% and 7%, respectively.

The U.S. Infrastructure bill

The US House of Representatives decided to postpone a vote on a trillion-dollar infrastructure bill after progressive Democrats insisted they would not vote on it unless they could also vote on social spending and a $1.75 trillion climate change package.

Pelosi had been pushing for Thursday’s vote on the infrastructure bill, which lawmakers from both parties have been working on.

Yesterday, US President Joe Biden unveiled the $1.75 trillion economic and environmental plan, which he said had united Democrats, but was quickly rejected by members of his party.

Calendar

Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, stayed unchanged at 0.3% on a monthly basis in September. On a yearly basis, the PCE Price Index edged higher to 4.4% from 4.2% but came in lower than the market expectation of 4.7%. the Core PCE Price Index, the Fed’s preferred gauge of inflation, remained steady at 3.6% on a yearly basis, compared to market expectation of 3.7%.

The United States’ Real Gross Domestic Product (GDP) expanded at an annual rate of 2.0% in the third quarter of 2021. This marked a sharp deceleration from the 6.7% growth recorded in the second quarter and also missed consensus estimates for a reading of 2.7%.

Inflation in Germany, as measured by the Consumer Price Index (CPI), rose to 4.5% on a yearly basis in October from 4.1% in September. This reading came in higher than the market estimate of 4.4%. the annual Harmonized Index of Consumer Prices (HICP), the European Central Bank’s preferred gauge of inflation, climbed to 4.6% from 4.1% in the same period