Closing Report 22.10.2021

strong earnings drive markets higher

 

AMERICAN MARKETS MID DAY

United States major stock markets  started the week mixed as idustrial production in the United States declined 1.3% month-over-month in September, falling way below market expectations, according to a report published by the Federal Reserve on Monday. However, annually the figure was up by 4.6%. Meanwhile, Amazon announced that it will hire 150,000 new employees for the holiday season. Also that day, The Walt Disney Co plunged by 3%. Tuesday trading session closed higher after Johnson and Johnson, Halliburton Company, the Procter & Gamble Company and Philip Morris international Inc all reported anual rises in their quarterly revenues. Meanwhile, White House Press Secretary Jen Psaki told reporters that US President Joe Biden is satisfied so far that the progress continues to be made on resolving issues in supply chain disruptions, specifically the jams in American ports. On Wednesday, major US stocks extended their gains with the Dow Jones Industrial Average gaining over 170 points and setting a fresh intraday record high. Meanwhile, Verizon and Abbott Laboratories each reported positive growth in revenue. On Thursday, major indexes of the region continued their uptrend with S&P 500 reaching new all-time high. Investors were generally optimistic due to a strong ongoing earnings season, despite concerns that inflation pressures could affect their profit margins. Meanwhile, co-working space company WeWork debuted on stock markets and jumped over 11% at the day’s high. Today, at European closing time, markets are evolving mixed following weaker eanrings reports from Intel and Snap. Meanwhile, American Express and Schlumberger reported strong earnings. The White House also reported that spending bill discussions were « coming along » but that there was no specific timeline for a final agreement.

EUROPEAN MARKETS CLOSING

Major European markets closed lower on Monday as investors were cautious ahead of the releases of the quarterly reports this week. Meanwhile, Valvena shares rose 46% after it said a Phase 3 trial showed its vaccine candidate, VLA2001, outperformed AstraZeneca’s in a trial of 4,012 people, with a significantly more favorable tolerability profile. On Tuesday, major stocks went higher even though ECB’s Rehn noted that longer inflation could alter expectations, while Lane said conditions for an interest rate hike have not been met yet. On the business front, Kering reported a 12.6% annual revenue increase for the third quarter of 2021, with the figure reaching €4.19 billion. Wednesday’s session closed on the flat line as Eurostat reported an inflation rate of 3.4% for the Eurozone and 3.6% for the wider Union, both up 0.5% from last month. This followed Germany reporting staggering energy price increases and the United Kingdom reporting worse than expected results in consumer and producer prices for September. On Thursday, European stocks closed downards after the consumer confidence across the Eurozone edged down to -4.8, a 0.8 decrease compared to September, according to a preliminary report published by the European Commission. In addition, European Central Bank Governing Council member Ignazio Visco (pictured) stated that he believes supply chain bottlenecks could last longer than expected. Shares on the major European stock market indexes traded higher as the Friday session came to a close, seemingly boosted by upbeat sentiment on Wall Street.

ASIAN PACIFIC MARKETS CLOSING

Shares in Asia-Pacific region started the week lower with the Hang Seng dipping by 0.53%. On the data front, retail sales in China annually increased by better than expected 4.4% last month, with GDP growth for the third quarter nearly hitting estimates at 4.9% and the industrial sector underperfoming by expanding 3.1% in September. Also, Australian Prime Minister Scott Morrison told his Liberal Party on Monday that he plans to commit to a net-zero emissions target by 2050 at the United Nations Climate Change Conference at the end of the month. On Tuesday, stock markets in the region closed mostly higher as the investors analyzed the minutes from the Reserve Bank of Australia’s (RBA) latest monetary policy committee meeting. The Australian’s central bank also added that the country is expected to get back on its « pre-Delta path » in the following year’s second half. On Wednesday, major stock markets extended their gains after the People’s Bank of China (PBoC) announced it decided to keep its interest rates unchanged (one-year loan prime rate at 3.85% and five-year loan prime at 4.65%). Meanwhile, Japan’s total merchandise trade deficit went under analysts’ projections in September, landing at ¥622.8billion (around $5 billion), according to a report released by the country’s Ministry of Finance. Asian stock markets traded mixed on Thursday as all eyes were on China Evergrande Group that that resume trading after the company, whose debt is estimated at $300 billion, called for a trading halt on October 4. For its last trading day of the week, the region main indexes closed higher after the newest reports on Japan’s private sector’s outpout and consumer prices showed upbeat results. Meanwhile, Australia’s Victoria left the lockdown imposed to curb the spread of coronavirus in the state.

COMMODITIES & FOREX MARKETS

• The Organization of the Petroleum Exporting Countries (OPEC) and its oil-producing partners (OPEC+) are raising oil production « a little more than they agreed to do, » Russian President Vladimir Putin revealed on Thursday.
• Crude inventories in the United States increased by 3.29 million barrels in the week ending October 15, exceeding analyst forecasts, private data from the American Petroleum Institute (API) reportedly revealed on Tuesday.
• Bitcoin crossed its all time-high after the release the release of the ProShares Bitcoin Strategy ETF, the first ETF listed in the U.S. that is tied to the price movement of bitcoin.

Digital World Acquisition Corp. halted several times due to volatility

Digital World Acquisition Corp. DWAC, the special purpose acquisition company merging with the newly formed Trump Media & Technology Group, was flirting with $70 per share in early premarket trade, which would represent a rise of more than 50%. The SPAC jumped 357% to $45.40 on Thursday, following the announcement. At $70, DWAC would have a market capitalization of roughly $2 billion. The Digital World transaction values Trump Media at an initial $875 million, for a company which plans to roll out a beta version of a social-media platform next month, and subsequently produce « non-woke » news shows, entertainment and podcasts.
SPAC stands for special purpose acquisition company, which raises money on the public markets with a goal of merging with a private company and taking it public within two years. Investors typically have no clue what the target company will be when the SPAC debuts and trades on the stock exchange.