The US stock market closed yesterday in the green zone. Almost all sectors of the economy showed growth yesterday, but the biggest gains were in the health care, technology and industrial sectors. At the close of the NYSE, the Dow Jones index increased by 1.56%, hitting a one-month high; S&P 500 increased by 1.71% and NASDAQ added 1.73%.
Fed spokesman Bullard said yesterday that the Fed should strive to reduce the QE program as soon as possible, as high inflation is a cause for concern.
According to Michael Schumacher of Wells Fargo Securities, inflation caused by the supply chain crisis will push bond yields higher over the next few weeks. Schumacher also sees the expectation that the Federal Reserve will respond to yields increase. He notes that several central banks, including Norway and New Zealand, have already adjusted their rates. The Fed is likely to cut purchases and announce it next month.
Amazon is buying refurbished cargo versions of 10 Airbus A330-300 planes, as well as an unspecified number of 777-300ERs. The purchase of the long-range cargo planes will allow Amazon to ship goods directly from China to the US and help avoid shipping delays.
Boeing is dealing with a new defect of its 787 Dreamliner that has caused delayed aircraft deliveries and drawn increased attention from the US government.
Chip maker TSMC announces the opening of a chip manufacturing plant in Japan. TSMC is already building its most advanced chip plant in Arizona and is considering the possibility of opening a plant in Germany.
European stock indices were also on the rise yesterday. German DAX increased by 1.4%, French CAC 40 added 1.3%, Italian FTSE MIB increased by 1.2%. The British FTSE 100 and the Spanish IBEX 35 added 0.7% and 0.8%, respectively.
British railroad operator Freightliner claimed that they are returning to diesel-powered trains as the electricity costs had become too high. Germany’s economic recovery after the lifting of coronavirus restrictions has been hampered by disruptions in the supply of certain industrial goods. The country’s leading economic institutions have adjusted their forecasts downward.
The G7 finance ministers have agreed to cooperate in solving global supply chain problems. Europe is starting to use up its gas reserves from underground storage facilities. The state of gas reserves in Europe’s storage facilities and the inability to fill them to a safe level by the onset of the cold weather due to the global shortages is the main fear that pushes the gas prices up.
The US oil inventories increased by 6.1 million barrels within the week. The IEA raised its oil demand forecasts for 2021 and 2022 by 170,000 bpd and 210,000 bpd, respectively. Goldman Sachs, head of energy research, claims that oil prices could remain at a higher level in coming years as demand recovers while supply remains limited.
Natural gas inventories in the US increased by 81 billion cubic meters against an expected 94 billion cubic meters. The price of gas in Europe has risen again above $1200 per thousand cubic meters. The UAE Energy Minister Mazroui said yesterday that the The UAE will produce more natural gas with the possibility of its export.
The deadly typhoon Compassu was hitting Hong Kong and southern China. But Asian stock indices have risen on Friday, fueled by a rally on Wall Street driven by strong corporate earnings and the fact that China eased restrictions on mortgages at some of its biggest banks. Japan’s Nikkei added 1.67%, China’s CSI 300 increased by 0.35%, South Korea’s Kospi added 0.92% and Australia’s ASX 200 added 0.69%.
China’s economy is now experiencing a downfall in many sectors: real estate, the energy crisis, weak consumer sentiment and rising commodity prices.
Main market quotes:
- S&P 500 (F) 4,438.26 +74.46 (+1.71%)
- Dow Jones 34,912.56 +534.75 (+1.56%)
- DAX 15,462.72 +213.34 (+1.40%)
- FTSE 100 7,207.71 +65.89 (+0.92%)
- USD Index 93.97 −0.06 (−0.06%)
Important events for today:
- US Retail Sales (m/m) at 15:30 (GMT+3);
- US Empire State Manufacturing Index (m/m) at 15:30 (GMT+3);
- US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3);
- US FOMC Member Williams Speech at 19:20 (GMT+3).
