The US stock market closed Friday with confident growth, but the main indices were left in the red zone at the end of the week. Dow Jones Industrial Average increased by 1.43% on Friday (-1.19% for the week), S&P 500 added 1.15% (-1.92% for the week), Nasdaq increased by 0.82% (-2.59% for the week).
The news of the success of Merck’s COVID-19 antiviral pill is putting significant pressure on the quotes of vaccine manufacturers and other pharmaceutical companies that are involved in the production of the COVID-19 drug. On Friday, shares of Moderna, Novavax, and BioNTech suffered the most. Pfizer and Johnson&Johnson were not significantly affected. Asian pharmaceutical companies that are part of the Hang Seng Index also fell on Monday because of an experimental drug from Merck.
The well-known Kathy Wood fund showed record quarterly capital outflows. Meanwhile, the outflows continued for the second quarter in a row.
Western European stock markets opened the first trading session of October with a decline. Investors are analyzing statistical data that indicate accelerating inflation and slowing economic recovery in the region. Against the background of rising inflation in Germany, workers started to strike, demanding higher wages to cover the price increases. Amid a surge in energy prices, inflation in the Eurozone jumped to 3.4%, its highest level in 13 years. On Friday, the composite index of the largest companies in the region Stoxx Europe 600 fell by 0.42% (-2.49% for the week), British FTSE 100 decreased by 0.84% (-0.35% for the week), German DAX lost 0.68% (-3.46% for the week), French CAC 40 decreased by 0.04% (-2.49% for the week). Italian FTSE MIB decreased by 0.27% (-1.87% for the week), while Spanish IBEX 35 increased by 0.04% but still declined on a weekly basis (-1.41%).
The energy crisis in Europe continues. A German coal-fired power plant was forced to shut down last week after it ran out of coal. Last week saw new fuel price records in Europe as energy companies rushed to replenish supplies ahead of the northern hemisphere winter, while alternative fuels such as coal are also in short supply. There is a huge risk that rising energy prices in Europe will lead to further plant closures. Analysts at the Bank of America have lowered the outlook for European stocks and expect them to fall by nearly 10% by the end of the year amid worsening macroeconomic situation.
Oil fluctuates around $75-76 amid increasing OPEC+ production. The OPEC+ meeting will take place today. The organization may increase the size of its planned production in order to soften concerns about the oil supply in the market. A surge in production could temporarily lower oil prices or at least suspend the growth.
There was a pipeline leak in the US. More than 3,000 barrels of oil spilled into the Pacific Ocean in California due to a leak in an Amplify Energy pipeline.
Asian stock markets ended Friday’s trading in the red zone. Japan’s Nikkei 225 index fell by 2.31 % on Friday, to its lowest level in nearly a month. At the same time, the market was not supported by positive statistics. Over the past week, Nikkei 225 lost 4.9%. South Korea’s Kospi index decreased by 1.62%, to its lowest value in more than six months. At the end of the week, Kospi lost 3.28%. The Australian ASX 200 decreased by 2% over the day to its lowest level in four months. The ASX 200 ended the week -2.1%.
Despite a 0.43% rise in China’s national CSI 300 stock index at the end of the week, analysts expect a worse quarter as Beijing’s crackdown on private enterprises, China Evergrande Group’s debt crisis, and nationwide power outages negatively affect stocks. There is “Golden Week” in China in honor of the National Day holiday, so traders will have time to evaluate further prospects.
Chinese real estate developer Evergrande has resumed 46 suspended real estate projects. Meanwhile, Evergrande again failed to pay interest on its debt securities to foreign investors last week. The Hong Kong Stock Exchange suspended Evergrande shares trading on Monday.
Main market quotes:
- S&P 500 (F) 4,357.04 +49.50 (+1.15%)
- Dow Jones 34,326.46 +482.54 (+1.43%)
- DAX 15,156.44 −104.25 (−0.68%)
- FTSE 100 7,027.07 −59.35 (−0.84%)
- USD Index 94.07 −0.16 (−0.17%)
Important events for today:
- Switzerland Consumer Price Index at 09:30 (GMT+3);
- OPEC+ Meeting at 13:00 (GMT+3).
