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Global Fundamental Analysis 28/11/2022

Global Fundamental Analysis 28/11/2022, FP Markets

Opening Call: The Australian share market is to open higher.

U.S. stocks ended mixed in a shortened trading session. The yield on the 10-year U.S. Treasury note slipped to 3.69% from 3.71% on Wednesday. The WSJ Dollar Index rose 0.23% to 98.92. Oil prices ended lower as investors weighed prospects for Chinese demand and monitored talks over a price cap on Russian crude. And gold futures settled higher on a slightly stronger dollar.

Australian Market

Australia’s S&P/ASX 200 benchmark index closed 0.2% higher, rounding out a weekly gain amid strength in consumer, real-estate and financial stocks. Nine of the ASX 200’s 11 sectors finished higher, with only the commodity-driven materials and energy sectors losing ground. The ASX 200 gained 1.5% across the week.

US Market 

U.S. stocks ended a shortened trading session Friday mixed, with markets subdued following Thursday’s Thanksgiving holiday. The S&P 500 fell less than 0.1% while the tech-heavy Nasdaq Composite Index dropped 0.5%. The Dow Jones Industrial Average rose 0.5%. U.S.

Stock markets closed early at 1 p.m. ET. Investors have some wind at their backs heading into the year’s end. Stocks have been rallying since October, the holidays tend to be seasonally strong for equities, and the market has responded well to the last two inflation reports, said Frank Cappelleri, founder of research firm CappThesis.

Commodities

Gold prices were flat amid choppy trade as a modest rebound in the U.S. dollar put pressure on the yellow metal after the minutes of the Federal Reserve’s last meeting, released on Wednesday, helped send prices of precious metals higher. December gold advanced 0.1% to $1,746 per ounce on Comex.

“Gold is marginally lower today but has been quite choppy throughout the session, and broadly lacked any real direction. We could be seeing a little profit-taking as the dollar edges higher following the relief rally that followed the Fed minutes,” said Craig Erlam, senior market analyst at Oanda.

Oil Futures

Oil futures settled lower, wrapping the holiday week down nearly 5% — a third-straight weekly drop. Investors weighed prospects for Chinese demand and monitored talks over a price cap on Russian crude. West Texas Intermediate crude for January delivery fell 2.1% to $76.28 a barrel on the New York Mercantile Exchange.

January Brent crude, the global benchmark, settled down 2% to $83.63 a barrel on ICE Futures Europe. Crude prices have retreated sharply in November, with weakness attributed in part to disappointment over China’s continued Covid-19 restrictions. Meanwhile, the European Union delayed talks on approving a price cap on Russian oil until at least Monday.

Forex

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0425 to lows near US$1.0353 and was near US$1.0380 at the US close. The Aussie dollar dipped from highs near US67.74 cents to lows near US67.11 cents and was near US67.15 cents at the US close. And the Japanese yen eased from near 138.42 yen per US dollar to near JPY139.59 and was around JPY139.10 at the US close.

European Markets

European sharemarkets were little changed on Friday as hopes of slowing interest rate hikes offset a real estate sector (-0.9%) sell-off and retailers (-0.6%) were hurt by fears of a bumpy holiday shopping season. Shares of Credit Suisse slid 6.6% to a record low in the wake of capital raise plans. Germany’s economy, as measured by GDP, expanded by 0.4% in the September quarter and by 1.3% on the year (survey: +1.2%). The continentwide FTSEurofirst 300 index rose by 0.1% and the UK FTSE 100 lifted by 0.3%. For the week, the FTSEurofirst 300 added 1.7% and the FTSE 100 rose 1.4%.

Asian Markets

Earlier, in Asia, Japan’s Nikkei Stock Average fell 0.35%, tracking losses in most regional equity markets. Most asset markets stayed in consolidation mode after the latest Federal Open Market Committee minutes-driven surge, said Charu Chanana, market strategist at Saxo Markets, adding that China’s zero-Covid policy remains in focus.

Chinese stocks ended mixed, extending a muted trading pattern amid a week of mixed signals. While the latest minutes from Federal Reserve meetings showed that officials thought they should slow the pace of interest-rate increases soon, investor sentiment remained cautious as China’s Covid infections surged and local governments tightened restrictions. The Shanghai Composite Index rose 0.4% while the Shenzhen Composite Index fell 0.7%. The tech-heavy ChiNext Price Index lost 1.1%.

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