Market Monitor - 19 November 2021
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Market Monitor – 19 November 2021

Global stock markets have had a mixed week with concerns about rising inflation and increasing Covid-19 infection levels putting a brake on gains. Falls in the price of oil and other commodities have also had a short-term impact on shares in energy and mining companies – although cheaper crude costs could be good news for major economies in the months ahead.
Governments in both the United States and China have this week taken steps to release stocks from their strategic oil reserves in a bid to dampen down prices and ease inflationary pressures. While these moves have been effective so far, they are a sign of how seriously general price rises are being taken by policymakers as demand surges in the wake of the pandemic.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.6% down for the week so far, with the S&P 500 gaining 0.5% – the difference in fortunes can be explained by the fact the Dow has a greater proportion of traditional stocks such as oil companies and miners.
The S&P was also helped by a rebound in Tesla shares following last week’s slump. Exercise equipment firm Peloton also performed well, with investors taking the view that recent falls have made the company’s shares good value.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 1.3% down for the week, with the index hit hard by falling crude prices: both Shell and BP were among the week’s biggest losers. The former company announced plans on Monday to move its tax residence to the UK from the Netherlands and end its dual listing in Amsterdam and London. Meanwhile, solid earnings reports from Vodafone and Land Securities saw shares in both businesses rally.
UK inflation data on Wednesday showed that prices in Britain were rising at their fastest rate in a decade: analysts now firmly expect the Bank of England to raise interest rates when its Monetary Policy Committee meets next month. With data from the Office for National Statistics showing an increasingly healthy jobs market, there appears to be more scope for the Bank to tighten monetary policy.

In Frankfurt, the DAX index ended Thursday’s session up 0.8% for the week, while France’s CAC 40 gained 0.7%. Investors in the eurozone were reassured by the latest comments from European Central Bank governor Christine Lagarde suggesting that an increase in interest rates remains some way off.

 

However, there is growing cause for concern about sharply rising Covid-19 rates in Germany, while several European Union member states have started to impose tougher restrictions, on unvaccinated people in particular.

Asia

In Asia, both the Hang Seng index in Hong Kong and Japan’s Nikkei 225 index of leading shares finished level for the week at the end of Thursday’s session. Investors in China remain nervous about the state of the country’s property sector, with falls in sales and construction levels reported this week. Japan’s economy shrank more quickly than expected between July and September, while the country’s export growth fell to an eight-month low in October.
November 12
November 18
Change (%)
FTSE 100
7347.9
7256.0
-1.3
FTSE All-share
4194.6
4152.8
-1.0
S&P 500
4682.9
4704.5
0.5
Dow Jones
36100.3
35871.0
-0.6
DAX
16094.1
16221.7
0.8
CAC 40
7091.4
7142.0
0.7
ACWI
756.8
756.4
-0.1
Hong Kong Hang Seng
25328.0
25319.7
0.0
Nikkei 225
29610.0
29598.7
0.0

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 18/11/2021.

19 November 2021
Mark King
Mark King
Head of Investment Content
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Market Monitor – 19 November 2021

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