Weekly Excerpt 11/10/2021
Weekly summary from October 04 to 08
- The US equity market has managed to close the first week of October in positive territory, immersed in high levels of volatility. Cyclical sectors have been showing greater strength and attracting a greater flow of funds in recent weeks. Eight of the eleven S&P 500 sectors have closed in positive territory, led by the Energy and Financials sectors with gains of +5,02% and 2,26% respectively.
- A positive week for the European equity market, with all major indices closing in the green. The best performing sectors, as in the US, were the cyclical sectors. The financial sector (SX7P) with a rise of +4,35% has led the rally in the old continent, so far this year the sector has shown a rise of +35% and is very close to pre-covid-19 levels. The Oil & Energy Sector has maintained its good run closing +2,31%.
- Senate Republican leader Mitch McConell has succeeded in getting Democrats to agree to an extension until December that will allow the debt limit to be raised by $480 billion. Thus avoiding what could have been the first federal default by the United States.
- The market was eagerly awaiting Friday's employment data, which came in well below expectations. Analysts had expected 500,000 new jobs to be created, but the figure came in at just 194,000. This is the second consecutive month that the figures have surprised the market due to the weakness of the data, on the other hand, the unemployment rate has fallen to 4.8% compared to expectations of 5.1%, so the rate still remains above pre-pandemic levels.
- Many economists believe that with government subsidies set to expire next month, there could be an increase in the number of people accepting open vacancies.
- The employment report was the last one before the next Fed meeting at which many expect the start of the tapering of the purchase program to be announced. Recall that the Fed mentioned that tapering would be warranted if employment data were strong and this has not been the case. However, with the high levels of inflation, we should not rule out that the Federal Reserve will go ahead with the possible adjustment to its monetary policy.
| AMERICA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| DOW JONES INDUS. AVG | 34.746,25 | 1,22% | 13,53% |
| S&P 500 INDEX | 4.391,34 | 0,79% | 16,91% |
| NASDAQ COMPOSITE | 14.579,54 | 0,09% | 13,12% |
| EUROPE | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| Euro Stoxx 50 Pr | 4.073,29 | 0,94% | 14,66% |
| FTSE 100 INDEX | 7.095,55 | 0,97% | 9,83% |
| CAC 40 INDEX | 6.559,99 | 0,65% | 18,17% |
| DAX INDEX | 15.206,13 | 0,33% | 10,84% |
| IBEX 35 INDEX | 8.955,00 | 1,77% | 10,92% |
| SWISS MARKET INDEX | 11.764,99 | 1,64% | 9,92% |
| ASIA | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| NIKKEI 225 | 28.048,94 | -2,51% | 2,20% |
| HANG SENG INDEX | 24.837,85 | 1,07% | -8,79% |
| CSI 300 INDEX | 4.929,94 | 1,66% | -5,40% |
| COMMODITIES | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| WTI | 79,50 | 4,77% | 63,85% |
| BRENT | 82,53 | 4,10% | 59,32% |
| NATURAL GAS | 5,61 | -0,20% | 120,91% |
| CORN | 530,00 | -2,12% | 9,50% |
| WHEAT | 733,00 | -2,95% | 14,44% |
| GOLD $/oz | 1.755,90 | -0,06% | -7,35% |
| SILVER $/oz | 22,64 | 0,46% | -14,28% |
| COPPER | 427,75 | 2,12% | 21,55% |
| PLATINUM | 1.027,76 | 5,18% | -4,14% |
| COINS | QUOTE | Δ %5 Days | Δ % YTD |
|---|---|---|---|
| EURUSD | 1,157 | -0,21% | -5,27% |
| AUDUSD | 0,731 | 0,70% | -5,00% |
| CADUSD | 0,802 | 1,39% | -2,05% |
| CHFUSD | 1,079 | 0,38% | 4,77% |
| GBPUSD | 1,362 | 0,55% | -0,37% |
| CNYUSD | 0,155 | 0,35% | -1,28% |
| JPYUSD | 0,009 | -1,04% | 8,64% |
| USDBRL | 5,521 | 2,92% | -5,84% |
| USDMXN | 20,710 | 1,28% | -3,84% |
| USDCOP | 3766,81 | -0,70% | -8,95% |
| XBTUSD | 54671,20 | 13,58% | 88,55% |
To keep in mind during the week
- The presentation of corporate results for the third quarter of the year begins. The focus will be on whether companies can match the 28.31TP3Q earnings growth projected for the quarter. A further increase over earnings estimates would be the fifth consecutive quarter, marking the longest streak since 2005.
- According to data firm Factset disruptions and rising supply chain costs are the factors most cited by companies so far as having a negative impact on earnings and the adverse impact is expected to continue for the next few quarters.
- U.S. Treasury Secretary Janet Yellen has mentioned that she is confident that Congress will pass legislation to implement the global corporate minimum tax agreed to by 136 countries. She believes that actions to bring the United States into compliance with the global minimum tax would likely be included in the so-called reconciliation budget bill containing President Joe Biden's proposed spending initiatives.
- Among the week's economic highlights, the focus will be on Wednesday's Consumer Price Index (CPI) data. According to the consensus, a monthly increase of 0.3% and an annual increase of 5.3% is expected. On the other hand, the Producer Price Index will be released on Thursday and on Friday the market will see retail sales data.
- Investors will closely watch the release of the minutes of the last meeting held by the FED. Expectations about the start of the tapering of the purchase program are high, beyond the weak employment data of last Friday, October 08. This data may not be so significant considering that the latest revisions of the reports have been corrected upwards and the US economy has now recovered half of the jobs deficit it had in December.
- Goldman Sachs has cut its forecast for U.S. growth for this and next year, citing a lagging recovery in consumer spending as the main factor. According to this report the bank now expects growth of 5.6% annually in 2021 (5.7% previously) and 4% by 2022 (4.4% previously).
- Starting Monday, the annual meetings of the World Bank and the IMF will be held. New economic projections and the plan to redistribute $650 billion in SDRs (the IMF's own currency) to help the poorest nations are expected to be announced. The future of IMF head Kristalina Georgieva is in doubt after allegations that she pressured World Bank staff to alter data in favor of China when she was in her previous position.
Economic Calendar
Before market opening
