Weekly Recap 8-12 November

Inflation fears dominated the market this week. Wall Street closed higher Friday, November 12th, driven by the rise of market leaders, as investors shrugged off disappointing US economic data.

The U.S.

A University of Michigan survey showed that US consumer sentiment in early November plunged to a decade low as household living standards were hurt by soaring inflation, with few believing that what policymakers were doing was enough to ease the issue.

However, US indices ignored this data and recorded collective gains during the weekend’s trading.

The Dow Jones index rose by 0.5% to close at 36098 points, the Nasdaq index rose by 1% to close at 15,860 points, and the S&P 500 index rose by 0.72% to close at 4,682 points.

johnson & Johnson stock also witnessed a rise after the company announced the split into two companies and separated the health care sector from the manufacture of drugs and medical equipment.

But Tesla’s stock fell on news that CEO Elon Musk was selling an additional $700 million of shares, in a new chapter in a story that began with a Twitter poll by Musk about whether he should sell shares he owns in Tesla.

Europe

On Friday, November 12, European shares closed at a new record high, ending the week with the sixth consecutive weekly rise.

The French CAC index witnessed a positive performance during this week’s trading, to close at 7091.4 levels, which is the highest level the index has reached since its inception.

The British FTSE index also rose by 0.6% during this week to close at its highest level since February 24, 2020, and the German DAX index witnessed a rise of 0.25% to close at 16,094 levels, the highest levels for the German index in its history.

The EURO600 index rose to a new peak to close at 486.75 points, recording a weekly increase of 0.7%.

European companies results

Strong results announced by Richemont, owner of the Cartier brand, capped a season full of positive business results.

Richemont stock rose 10.9% and had the best performance of the day among European stocks after the company’s profit for six months exceeded expectations.

The luxury goods sector also received an additional boost from LVMH’s 2.5% gain after news that Louis Vuitton plans to open its first duty-free store in China.

French blue-chip stocks ended the week at an all-time high, with Renault shares jumping 4.4% after Morgan Stanley raised its recommendation for the stock.

The mining sector topped the best-performing sectors in the week, rising 4%, after some calm prevailed in the debt-ridden Chinese real estate market, especially Evergrande, which pushed commodity prices to rise.

But the shares of the travel and leisure sector companies were the worst performers in the week, falling 3.7%, as investors fear that European countries will impose new restrictions due to a new wave of the Corona outbreak.

Asia

Technology shares supported the Tokyo Stock Exchange to close higher, with investors buying in, but the rise was affected by concerns about the impact of increased costs on corporate profits.

The Nikkei index rose 1.13%, recording 2,9609.97 points, to continue its gains for the second session, while the broader Topix index rose 1.31% to 2040.60 points.

Technology shares led gains on the Nikkei, tracking Wall Street as the semiconductor index rose after its worst session in more than six weeks.

SoftBank Group’s share rose 2.58%, recording an increase of 10% during the week, while Tokyo Electron, a chip production equipment maker, advanced 1.96%.

On the other hand, Suzuki Motors shares lost 2.38% after the company’s net profit in 6 months was less than market expectations.

Oil

Oil prices fell on Friday and erased gains from Thursday’s session on concerns that the Federal Reserve will accelerate plans to raise interest rates to curb inflation.

Brent crude futures fell 70 cents, or 0.8%, to settle at $82.17 a barrel. West Texas Intermediate crude fell 80 cents, or 1%, to settle at $80.79 a barrel.

Opec

On Thursday, OPEC lowered its forecast for global demand for the fourth quarter by 330,000 barrels per day from last month’s forecast, as higher energy prices impeded the course of economic recovery processes from the pandemic.

OPEC and its allies led by Russia, known as OPEC+, agreed last week to stick to plans to gradually increase production by 400,000 barrels per day each month.

USD

The US dollar succeeded in maintaining its gains during the trading session on Friday, November 12th, with the US currency achieving the largest weekly increase in nearly three months.

The dollar fell 0.14% against the yen, recording 113.915, after reaching a low of 113.77, and the euro fell 0.06%, recording 1.1443 dollars, after touching near the lowest level in 16 months, recording 1.433 dollars.

And the pound sterling recorded an increase of 0.39% against the dollar.

AUD rose 0.53%, recording $0.733, after falling earlier to a low of 0.7277 for the first time in more than a month.

Calendar

As measured by the Consumer Price Index (CPI), inflation in the US surged to 6.2% on a yearly basis in October from 5.4% in September. This print surpassed the market expectation of 5.3% by a wide margin. The annual Core CPI, which excludes volatile food and energy prices, rose to 4.6% in the same period, compared to the market expectation of 4%.

Consumer confidence in the US deteriorated in early November with the University of Michigan’s Consumer Sentiment Index declining to 66.8 from 71.7 in October. This marked the lowest reading since November 2011.

The British economy expanded 1.3% QoQ in the third quarter of 2021 when compared to a 5.5% growth seen in Q2 and 1.5% expectations. On an annualized basis, the Kingdom’s GDP arrived at 6.6% in Q3 vs. 6.8% expected and 23.6% prior.