The US stock market traded yesterday without a single trend. By the close of the New York Stock Exchange, the Dow Jones index increased by 0.43% and updated a price high again, the S&P 500 index added 0.37%, and the NASDAQ technology index decreased by 0.05%. According to the Beige Book report, the US economy expanded at a moderate-to-moderate pace in September. However, several Federal Reserve Banks (FRBs) noted a slowdown in the recovery due to supply chain problems, labor shortages, and uncertainty over the COVID-19 delta strain. According to 22 out of 40 economists surveyed, persistently high inflation is the biggest risk for the US economy.
European stock indexes closed yesterday in the green zone. The British FTSE 100 gained 0.08%, German DAX added 0.05%, French CAC 40 increased by 0.54%, Italian FTSE MIB added 0.94% and Spanish IBEX 35 increased by 0.24%. Strong corporate reports of some European companies were a growth trigger. Husqvarna’s shares, a Swiss machinery and tools’ manufacturer, gained more than 8% on the strong report, while Nestle SA jumped by 2.7%.
Food shortages could be the next supply chain crisis. Sellers warn about periodic delays in various product categories. Labor issues and port congestion are also affecting food shipments.
US oil reserves showed another decrease of 431,000 barrels within the week. Supply shortages affect the increase in oil prices. OPEC+ is now discussing ways to balance oil prices, but the decision to increase production beyond the agreed levels was not made so far. Saudi Arabia has said that any additional oil from the OPEC+ cartel will do little to reduce rising natural gas and oil prices.
In Europe, gas prices increased by 58.9%, and electricity prices increased by 23.0% compared to the previous year. The gas storage in Germany is filled up about 70%, and the EU averages about 77%, comparable to 2015 levels.
Gold increased for the second day in a row as the US dollar continued to decline. Investors are waiting for comments from Federal Reserve officials this week that could provide insight into the prospects for tightening monetary policy.
In China, the Bank’s 5-year interest rate remained unchanged at 4.65% (forecast 4.65%, previous 4.65%). The annual interest rate remained unchanged (3.85% actual, forecast 3.85%, previous 3.85%). The slowdown in China’s real estate sector is hurting economic growth, and it is unclear if there are any new growth factors to fill the gap. Asian stock markets have been mostly down since the opening. Japan’s Nikkei 225 decreased by 1.82% from the open, China’s blue-chip index CSI 300 is trading flat, South Korea’s KOSPI lost 0.29%, Hong Kong’s Hang Seng decreased by 0.78%, but Australia’s ASX 200 added 0.02%.
Today’s most anticipated earning report releases are AT&T, Intel, Snap, Southwest, American Airlines, Danaher.
Main market quotes:
- S&P 500 (F) 4,536.19 +16.56 (+0.37%)
- Dow Jones 35,609.34 +152.03 (+0.43%)
- DAX 15,522.92 +7.09 (+0.05%)
- FTSE 100 7,223.10 +5.57 (+0.08%)
- USD Index 93.62 −0.11 (−0.12%)
Important events for today:
- US Philadelphia Fed Manufacturing Index (m/m) at 15:30 (GMT+3);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
- US Natural Gas Storage (w/w) at 17:30 (GMT+3);
- Australia RBA Governor Lowe Speaks at 22:00 (GMT+3).
