Market Monitor - 29 October 2021
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Market Monitor – 29 October 2021

Global stock markets have enjoyed a largely positive week, with shares in the US and Europe boosted by solid company earnings reports and easing fears of a coronavirus resurgence.
There are also signs that the recent surge in oil prices, which has helped keep inflation levels high across much of the world, may be starting to wane. News that sanctions against Iran could soon be lifted has given traders hope that the country’s oil may come back online, boosting global supply. Meanwhile, reports from the US suggest the country’s crude stockpiles are higher than previously thought.

US markets

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 28 October 0.1% up for the week so far, with the S&P 500 closing 1% higher. US tech stocks have performed particularly well this week: shares in electric vehicle maker Tesla were up ahead of the COP26 climate change summit in Glasgow in November, while strong earnings reports from Microsoft and Google owner Alphabet helped drive the sector higher.
Weaker-than-expect US growth figures for the third quarter of 2021 helped to allay fears of an imminent tightening of monetary policy. But some big American manufacturers including General Motors and 3M continue to complain of supply-chain problems which threaten to hold the recovery back in the months ahead.

The UK

In the UK, the FTSE 100 closed on Thursday 28 October 0.6% up for the week. Rishi Sunak’s Autumn budget and spending review was the financial highlight of the week: the chancellor offered some good news on post-pandemic growth and the public finances, but voters will probably have to wait until near the end of the current parliament in 2024-25 for any significant tax cuts. Shares in Britain’s hospitality businesses, however, rose on Sunak’s announcement of an ongoing business rates discount as well as a reduction on duty on beer and cider served on draught in the nation’s pubs.
Meanwhile, signs that coronavirus infection rates are starting to level off gave UK travel firms a boost: they are keen to avoid any return to international restrictions this winter. However, shares in Shell fell after the oil company provided a below-par trading update, and activist investor Third Point called for the business to be broken up.

Europe

In Frankfurt, the DAX index ended Thursday 28 October up 1% for the week, a gain that was matched by France’s CAC 40. The European Central Bank said it would keep monetary policy unchanged for now, despite rising inflation across the eurozone.
French aircraft manufacturer Airbus saw its shares rise 3% following a positive trading update – the firm said it has managed to remove some of the supply chain obstacles that hampered production earlier in the year. In Germany, however, Volkswagen reported that its operations were still being affected by the global shortage of computer chips.

Asia

In Asia, the Hang Seng index in Hong Kong slumped 2.2% while Japan’s Nikkei 225 index of leading shares edged 0.1% ahead during a challenging week. Investors are growing increasingly concerned about China’s property sector, with more developers looking likely to miss debt repayments following the recent difficulties at Evergrande.
October 22
October 28
Change (%)
FTSE 100
7204.6
7249.5
0.6
FTSE All-share
4108.9
4137.5
0.7
S&P 500
4544.9
4596.4
1.1
Dow Jones
35677.0
35730.5
0.1
DAX
15543.0
15696.3
1.0
CAC 40
6733.7
6804.2
1.0
ACWI
742.3
747.0
0.6
Hong Kong Hang Seng
26126.9
25555.7
-2.2
Nikkei 225
28804.9
28820.1
0.1

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 28/10/2021.

29 October 2021
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Market Monitor – 29 October 2021

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