Company / Analytics

Week 47 in brief

North America

At the beginning of the week, equities markets on Wall Street were relatively calm as traders waited for minutes from the Federal Reserve’s November meeting. The minutes showed that the central bank anticipates slowing the pace of interest rate hikes going forward, which gave stocks a boost into the end of the week even amid choppy sessions due to low trading volumes. A slew of solid retail earnings reports signaling some consumer strength even amid worries of economic weakness also lifted stocks.

How did the major indices perform? On Friday:

• The Dow rose 152.97 points or 0.45% to 34,347.03
• The S&P 500 fell 0.03% to end the day at 4,026.12.
• The Nasdaq Composite slipped 0.52% to 11,226.36

For the week:

• The Dow is up 1.78%,
• the S&P 500 is up 1.53%
• The tech-heavy Nasdaq is up 0.72%.

What drove the U.S. market?

• A slew of solid retail earnings reports signaling some consumer strength even amid worries of economic weakness lifted stocks.
• Worries about continued lockdowns in China kept markets in check. The country is ramping up Covid restrictions after seeing climbing case counts in recent days. Earlier in the week, China reported its first Covid deaths since May.
• Apple’s stock shed 2% on Friday after protests occurred at the iPhone maker’s major Foxconn supplier in China earlier this week. Analysts and investors have also feared that recent manufacturing shutdowns could dent supply this holiday season.
• Shares of the video game company Activision Blizzard slid more than 4% after Politico reported the Federal Trade Commission is likely to sue to block Microsoft’s $69 billion acquisition of Activision Blizzard. Microsoft shares traded flat.
• Shares of the software company Coupa Software popped 7, building on a 28.9% surge on Wednesday after Bloomberg reported that Vista Equity Partners is exploring an acquisition of Coupa.
• LGBTQ dating platform Grindr, which was listed under the new ticker GRND following its SPAC a week ago, has seen shares tumble despite experiencing a surge on listing day.
• The company began trading on the NYSE at $16.90 per share on Nov. 18 and closed at $36.50. It reached a high of $71.51 during its first session under the new ticker after merging with blank-check company Tiga Acquisition.

How did the European markets perform?

• It was a relatively slow trading session on Friday for European equities to close out an upbeat week.
• The pan-European Stoxx 600 had slipped 0.25% in late afternoon trading but pared losses to close flat. Sectors were a mixed bag, with mining and financial stocks shedding 0.6% and oil and gas adding 0.8%.
• The blue-chip index surpassed a three-month high Tuesday and notched its sixth consecutive weekly climb.
• Credit Suisse shares continued to slide despite it securing more than $4 billion in funding from investors to fund its second strategic overhaul. It closed Friday down nearly 6% at 3.35 Swiss francs ($3.54), a new record low.
• European investors also reacted well to several economic data points over the course of the week that have indicated a slightly shallower recession than previously feared.

How did Asian markets perform?

• Asian markets were mixed yesterday at the end of a week in which hopes that the Federal Reserve (Fed) will tone down its monetary tightening campaign were offset by fresh COVID lockdown fears in China.
• Asian equities struggled at end of the week, however, with Tokyo, Hong Kong, Singapore, Seoul, Taipei, Mumbai, Bangkok, and Jakarta all down.
• China’s Shanghai Composite Index closed up +0.40%, and Japan’s Nikkei 225 Stock Index closed down -0.35%.
• There were gains in Shanghai, Sydney, Wellington, and Manila.
• Regional sentiment was sapped by ongoing fears about the spike in COVID cases in China, which authorities are trying to contain with a series of targetted measures in big cities including Beijing and Shanghai. However, they are short of full-on lockdowns.
• Meanwhile, Jun Bei Liu, at Tribeca Investment Partners, was upbeat about the outlook for Chinese markets.

Bonds and Commodities

• U.S. Treasury yields were slightly lower Friday as investors digested the Federal Reserve’s November meeting minutes, which suggested that interest rate hikes would be slowed in the coming months.
• The yield on the benchmark 10-year Treasury note was about one basis point lower at 3.698%. The 2-year Treasury yield was last trading at around 4.475%, also about one basis point lower.
• Yields and prices move in opposite directions and one basis point equals 0.01%.
• Oil prices were 2% lower on Friday as worries about Chinese demand and haggling over a Western price cap on Russian oil.
• Brent crude futures settled down $1.71, or 2%, to trade at $83.63 a barrel, having retraced some earlier gains.
• U.S. West Texas Intermediate (WTI) crude futures were down $1.66, or 2.1%, at $76.28 a barrel.
• Spot gold was down 0.2% at $1,751.49 per ounce, coming off a one-week high hit earlier in the session. Bullion was up 0.1% for the week.

Currencies

• The euro slipped 0.1% against the dollar to $1.04015 but remained not far from the four-month high of $1.0481 touched in mid-November. For the week, the common currency was up 0.7% against the greenback.
• The dollar was 0.4% higher against the Japanese yen at 139.14 yen after data showed core consumer prices in Japan’s capital, a leading indicator of nationwide trends, rising at their fastest annual pace in 40 years in November, signaling to broaden inflationary pressure.
• Sterling was 0.21% lower at $1.2084, as investors remained concerned about the economic outlook for the United Kingdom.
• The offshore Chinese yuan fell about 0.3% to 7.2071 to the dollar, headed for a second weekly loss, as COVID-19 worries continued to weigh.
• Cryptocurrencies, which have come under intense selling following the high-profile collapse of crypto exchange FTX, remained choppy, with bitcoin down 0.6% at $16,485.

Next week

Next Monday is Cyber Monday in the U.S., a day that will feature numerous deals, discounts, and promotions for online shoppers. Similar to Black Friday, Cyber Monday sales are considered a proxy for the health of the U.S. consumer and retail sector. If Black Friday sales outperform this year, the strong performance could carry over into next week and the remainder of the holiday shopping season.

More earnings will come next week from Salesforce, TD Bank, Dollar General, Kroger, and Ulta Beauty, among others. The labor market will also be in the spotlight, with the Job Openings and Labor Turnover Survey (JOLTS), ADP’s National Employment Report, and the Labor Department’s November nonfarm payrolls report.

The latest updates on home prices will become available with the release of the Case-Shiller National Home Price Index and Freddie Mac’s House Price Index (HPI) for September. On Thursday, the Bureau of Economic Analysis (BEA) will release its Personal Consumption Expenditures (PCE) Price Index for October, offering an update on consumer inflation.