WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
Extending its robust performance from the preceding two weeks, the S&P 500 Index surpassed the 4,500 threshold for the first time since September. Notably, the week’s progress exhibited broad strength, with an equally weighted version of the S&P 500 Index outperforming its market-weighted counterpart by a full percentage point. The Russell 1000 Value Index also outperformed its growth counterpart, returning to positive territory for the year. Small-cap indices also showed significant outperformance. In Europe, the pan-European STOXX Europe 600 Index, measured in local currency, ended the week with a 2.82% gain, reflecting increased market expectations of impending central bank interest rate cuts. Major stock indices in Europe also recorded significant increases, with Germany’s DAX rising by 4.49%, and the UK’s FTSE 100 Index advancing by 1.95%.
US30 +1.94% |
US100 +1.99% |
US500 +2.24% |
GER40 +4.49% |
Spot silver rose to over $24 per ounce, marking a more than two-month high, as markets absorbed recent economic data from the US and China. In the US, both export and import prices fell more than expected in October, reaching 5- and 7-month lows respectively. Meanwhile, US natural gas futures experienced a decline of over 3.5%, falling below $3.0/MMBtu, the lowest level in five weeks. This decrease followed the Energy Information Administration (EIA) report of a larger-than-expected storage build and forecasts for mild weather thath would keep heating demand low, allowing utilities to continue injecting gas into storage. Last week, US utilities added 60 billion cubic feet (bcf) of gas to their storage capacity, exceeding expectations of a 40 bcf increase and bringing stockpiles to 3.833 trillion cubic feet (tcf), 5.6% above the five-year average for this time of year. Given record-high gas output and the expectations of warmer weather until November 21st reducing heating demand, the prospects point to further injections into storage during the weeks ending November 17th and November 24th.
NATGAS -2.39% |
On Friday, the Dollar Index approached the 104 mark, nearing its lowest level since September 1st, and is expected to post a loss of over 1% for the week. This decline is attributed to weaker-than-anticipated US economic data, which has reinforced expectations that the Federal Reserve is concluding its monetary tightening cycle. The market widely anticipates the central bank to maintain unchanged interest rates in December, with attention now shifting to when the Fed might commence rate cuts. Recent data revealed slower-than-expected growth in US consumer inflation for October, coupled with the first decline in retail sales in seven months. Additionally, the number of Americans filing new unemployment benefit claims rose to a three-month high last week. The dollar is expected to end the week with losses against major currencies, particularly experiencing significant declines against the Australian dollar and the Euro.
EUR/USD +2.18% |
USD/JPY -1.30% |
GBP/USD +1.97% |
USD/CAD -0.59% |
The cryptocurrency market is filled with speculation as Bitcoin struggles to surpass the $38k resistance level, while altcoins such as XRP, ThorChain’s RUNE, Dogecoin (DOGE), Render Token (RNDR), and newcomer TIA demonstrate varying degrees of strength. Investors are closely monitoring the potential approval of a Bitcoin spot Exchange-Traded Fund (ETF) by the U.S. Securities and Exchange Commission (SEC) as a potential market catalyst. Despite Bitcoin’s recent outperformance in network transactions, it remains within a narrow trading band. Altcoins show resilience, with XRP expecting gains, RUNE surging due to decentralized exchange activity, DOGE maintaining stability, RNDR benefiting from AI-driven interest, and TIA experiencing significant growth. The altcoins’ performance could be further boosted if the total market capitalization surpasses the 50-day Exponential Moving Average resistance. Investors are watching this dynamic closely, anticipating the potential impact of a new Bitcoin spot ETF and the influx of institutional investment into the crypto space.
BTC -0.74% |
ETH -3.65% |
LTCUSD -6.51% |
XMRUSD +0.50% |
In the United Kingdom, annual consumer price inflation slowed more than expected to 4.6% in October (from 6.7% the previous month), leading financial markets to increase expectations of interest rate cuts next year. Huw Pill, the Bank of England’s Chief Economist, pointed out before the data was released that even with the anticipated decline, inflation would still be “much too high” compared with the 2% target. Despite a tight labor market, with wages rising 7.7% in the three months to September, the Office for National Statistics estimated that unemployment remained unchanged at 4.2% in the three months to October.
In the Eurozone, European Central Bank (ECB) President Christine Lagarde indicated at a Financial Times event that policymakers expected inflation to rise at the beginning of next year as annual comparisons adjust. While hinting at the possibility of inflation accelerating, Lagarde suggested that another interest rate increase may not be necessary, emphasizing the importance of maintaining the current policy level for an extended period to reach the 2% medium-term target. Vice President Luis de Guindos also pushed back against market expectations for rate cuts, reiterating the commitment to maintain sufficiently restrictive monetary policy. The latest data confirmed the annual inflation rate in the Eurozone fell to 2.9% in October, the lowest level since July 2021.
In the United States, recent inflation reports indicated stability, with the headline Consumer Price Index remaining unchanged in October, partly due to a significant decline in energy costs. Core prices, excluding food and energy, rose 0.2%, resulting in a year-over-year increase of 4.0%, the slowest pace in two years. Producer-price inflation also surprised on the downside. Additionally, a Thanksgiving dinner survey by the American Farm Bureau suggested a 4.5% expected cost reduction in 2023, primarily due to lower prices for seven out of 11 food items. While Wednesday’s retail sales report showed a 0.1% decline in October, less than expected, home-related spending decreased, but consumer spending at bars, restaurants, and online continued to rise.
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