Closing Report 05.11.2021

the fomc announced it will start tapering bond buying this month

AMERICAN MARKETS MID DAY

United States major stock markets  started the week higher hitting new record highs with Tesla share price soaring and the energy sector in general gained. Also, investors focused on the major Federal Reserve meeting due on Wednesday where the Federal Reserve is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the coronavirus pandemic. On Tuesday, Wall Street extended its gains with the Dow Jones up 0.39% reaching a new all-time high while Pfizer share price rose 4.1% after the drugmaker said it expected 2021 sales of the COVID-19 vaccine it developed with German partner BioNTech to reach $36 billion. Also, U.S. President Joe Biden spoke at the COP26 saying that « we have to accelerate our progress » on climate. On Wednesday, stocks in America closed with solid gains after the US Federal Reserve’s Federal Open Market Committee (FOMC) announced that it unanimously decided to keep interest rates unchanged at the 0.00%-0.25% range. The FOMC also announced it will start tapering bond buying this month. U.S. indexes S&P 500 and Nasdaq notched record all-time closes for their fifth straight sessions, while the Dow Jones Industrial Average posted a record close for the fourth session in a row. In company news, CVS Health shares rose 5.7% after the company said its adjusted profit target for 2022 should largely meet Wall Street estimates while Lyft shares took 8.2% after the ride-hailing company reported an adjusted profit for the third quarter. Activision Blizzard Inc stock price tumbled 14.1% after the videogame publisher delayed the launch of two much-awaited titles. On Thursday, the S&P 500 and Nasdaq closed upwards, extending their streaks of record high closes to six sessions, as chipmaker stocks surged following Qualcomm’s strong financial forecast and investors digested the Federal Reserve’s decision to start reducing its monthly bond purchases. In buiness news, Moderna Inc. tumbled nearly 19% after the American company reported less-than-expected revenue for the third quarter of 2021. At European closing time, Wall Street’s main indexes are hitting record highs as data showed that nonfarm payrolls in the United States increased by 531 000 in October according to the US Bureau of Labor Statistics. Also, both Uber and Airbnb posted their reports recording an increase in their revenue.

EUROPEAN MARKETS CLOSING

Major European markets started the week with gains as the manufacturing activity in the United Kingdom further expanded in October compared to the previous month to surpass market estimates, according to a report published by IHS Markit. The seasonally adjusted Purchasing Managers’ Index (PMI) rose to 57.8 last month, marking the first increase in the last five months. On Tuesday, stocks in Europe traded mixed ahead of the eagerly-awaited Federal Reserve meeting. On the data front, Germany Manufacturing Purchasing Manager’s Index (PMI) stood at 57.8 in October, representing a decrease of 0.6 index points compared to September’s figure, according to the latest report by IHS Markit and BME while the Eurozone Manufacturing PMI slipped to 58.3 last month, marking the slowest sector expansion since February. In company news, Ferrari announced it’s Q3 revenues jumped 18.9% on annual basis while BP plc reported  its third-quarter earnings results, revealing better-than-expected underlying replacement cost profit (net profit) of $3.32 billion. On Wednesday, major stocks also traded while the France’s CAC 40 closed with a new all-time high. On the data front,  Services PMI Business Activity Index surged to 59.1 points in October, the service sector activity in the United Kingdom achieved the largest expansion in the last three months while the seasonally adjusted unemployment rate in the Eurozone (EA19) stood at 7.4% in September, declining 0.1 percentage points compared to the month prior, according to Eurostat’s. In earning news, Lufthansa jumped 7.0% after the airline posted a return to profit for the first time since the coronavirus crisis, boosted by the easing of travel restrictions while Raiffeisen Bank International rose 10.9% after its quarterly net profit blew past estimates on strong revenues and lower provisions. On Thursday, European markets closed higher after the Bank of England’s (BoE) Monetary Policy Committee (MPC) voted to leave Bank Rate at 0.1% while the seasonally adjusted Construction PMI Total Activity Index (PMI) in the United Kingdom reached 54.6 in October, unexpectedly rising 2 index points from the month prior, IHS Markit and Chartered Institute of Purchasing & Supply (CIPS) revealed and the Producer prices in both, the Eurozone (EA19) and the European Union (EU27), increased by 2.7% in September compared to the previous month, according to a Eurostat. In corporate news, Societe Generale share price took 2.8% after the bank posted a better-than-expected third-quarter earnings and launched a share buyback program of around 470€ millions. European equities closed the week with gains despite that the industrial  production in Germany missed estimates and decreased by 1.1% on a monthly basis in September, the country’s Federal Statistical Office Destatis said.

ASIAN PACIFIC MARKETS CLOSING

Shares in Asia-Pacific region started the week higher following econmical data, where the Caixin China General Manufacturing Purchasing Managers’ Index (PMI) increased by 0.6 percentage points in October compared to the previous month to climb to 50.6, surpassing market expectations while the apanese Jibun Bank Flash Manufacturing PMI Index was 53.2 in October, rising above analysts’ expectations, according to the report published by IHS Markit. On the pandemic side, Australi eased its travel rules while New Zeland ‘s capital is still under restrictions. On Tuesday, stoks in the region traded mostly lower afte the Reserve Bank of Australia (RBA) voted to leave its interest rate unchanged at 0.1% meanwhile South Korean October’s consumer price index grew 0.1% month-on-month and 3.2% year-on-year. On Wednesday, Asian shares extended losses with the U.S. Federal Reserve’s monetary policy decision in focus. Also, tensions between France and Australia continued after France’s Ambassador to Australia Jean-Pierre Thebault stated that the Australian government engaged in « deliberate deception » over the AUKUS trilateral deal. Meanwhile, the Caixin China PMI landed at 53.8 in October, surprising expectations and increased compared to the figure of 53.4 recorded in September, according to a report released by the IHS Markit. On Thursday, following the U.S. Federal Reserve decision, stocks in Asia were up while Japan’s service sector returned to expansion in October, marking an increase in business activity for the first time in 21 months as COVID-19 restrictions were eased. In comapny news, Fujifilm Holdings Corp stock price surged after the camera and drug maker released half-year earnings ahead of schedule, revealing a jump in sales and profit. Asian markets closed the week mostly down with traders focusing on earnings like Honda Motor Co. Ltd which unveiled a 6.8% dropped in revenue in the second quarter of 2022.

COMMODITIES & FOREX MARKETS

• The number of oil rigs in the United States increased by 6 in the week ending November 5 to 450, according to a report published by Baker Hughes on Friday. On an annual basis, the number of oil rigs jumped by 224.
• The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC (OPEC+) Ministerial Meeting on Thursday ended in a recommendation to increase production by 400,000 barrels per day, confirming earlier speculation and resisting pressure for a more significant increase
• The euro is following broad losses against the dollar and economists at Scotiabank see EUR/USD nosediving to the 1.10 over the next year.
• Ethereum has seen seven consecutive days of deflationary issuance amid its impressive price rally alongside an increase in demand. Over $3 billion worth of Ethereum has been burned since EIP-1559 was implemented.

COP26 strongly criticized by activists

Climate campaigners and environmental activists have harshly criticized the organization of the COP26 climate summit, describing the UN-brokered negotiations as the most exclusionary they ever known. The UK is hosting talks in Glasgow, Scotland until the end of November. Logistical difficulties, disability exclusion and lack of attendees from the Global South are just some of the criticisms among organizers. event organization.

“The UK is committed to hosting an inclusive COP,” a COP spokesperson said in a statement. “Ensuring that the voices of those most affected by climate change are heard is a priority for the COP26 Presidency, and if we are to deliver for our planet, we need all countries and civil society to bring their ideas and ambition to Glasgow,” they added. Meanwhile Asda Rehman, a spokesperson for the COP26 coalition, declared “it will go down as the worst planned, worst organized and least effective COP that I have ever known. It is just unbelievable.”

In addition, the well known activist Greta Thunberg said “It is not a secret that COP26 is a failure. It should be obvious that we cannot solve the crisis with the same methods that got us into it in the first place,” and adding “It is not a secret that COP26 is a failure. It should be obvious that we cannot solve the crisis with the same methods that got us into it in the first place,”.