WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
The week ended with mixed performance across major indices, highlighted by the S&P 500 Index approaching its longest winning streak in nearly two decades on Wednesday, securing its eighth consecutive gain, while the Nasdaq Composite Index achieved its ninth. However, the market’s strength was notably concentrated, as an equally weighted version of the S&P 500 Index underperformed its market-weighted counterpart by 190 basis points (1.90%), and the Russell 1000 Value Index trailed its growth counterpart by 404 basis points—the largest difference since March. In contrast, the pan-European STOXX Europe 600 Index closed 0.21% lower in local currency terms, influenced by fading optimism about a peak in interest rates. Major stock indices in Europe showed a mixed picture, with Germany’s DAX gaining 0.30%, while the UK’s FTSE 100 Index experienced a 0.77% loss.
US30 +1.31% |
US100 +2.85% |
US500 +1.31% |
GER40 +0.30% |
US natural gas prices have fallen to mid-September levels due to robust production, mild weather forecasts through the end of November reducing heating demand, and the opportunity for utilities to continue injecting gas into storage. November has witnessed a surge in natural gas production following a record high in October, with storage levels currently about 6% higher than the seasonal average. The anticipation of warmer-than-normal weather through mid-November further diminishes the need for natural gas. Meanwhile, Brent crude rose nearly 2% on Friday, aligning with equities’ gains as the broader financial market rebounded from the hawkish Federal Reserve comments. However, Brent crude is still expected to post a third consecutive weekly decline, driven by concerns over potential supply disruptions in the Middle East and uncertainties over demand in the US and China. The EIA revised its forecast, now expecting a 300,000 bpd decrease in total petroleum consumption in the US this year, reversing its previous projection of a 100,000 bpd increase.
NATGAS -14.10% |
On Friday, the Dollar Index approached 106, poised to end the week with a 0.8% gain, driven by Federal Reserve officials countering speculations that US interest rates had already peaked. Federal Reserve Chair Jerome Powell, in particular, stated on Thursday that the central bank was not convinced that it had taken sufficient measures to alleviate inflation concerns. Additionally, the latest Michigan consumer sentiment report revealed an increase in inflation expectations for the year ahead, reaching 4.4%, the highest level since April. Expectations for the five-year outlook also rose to 3.2%, a level not observed since March 2011. Although sentiment fell more than expected to a six-month low, the labor market demonstrated resilience, with weekly U.S. jobless claims decreasing by 3,000 to 217,000 last week, surpassing expectations of 218,000 and following an upwardly revised figure of 220,000 in the previous period.
EUR/USD -0.42% |
USD/JPY +1.44% |
GBP/USD -1.21% |
USD/CAD +1.01% |
Market participants in the cryptocurrency space are optimistic about a potential increase in Bitcoin’s value, supported by robust technical analysis signaling a bullish trend. The substantial surge in Bitcoin, climbing from $25,000 to $38,000 in the past two months, is credited to increased investor confidence and a lack of negative news catalysts. Technical analysts have identified an inverted head and shoulders pattern that indicates a potential upward movement toward the $37,185 resistance, with a subsequent target at the major daily resistance of $40,000 if surpassed. A suggested trading strategy recommends initiating a long position at $37,185, with a strategically placed stop loss at $36,272. The strategy emphasizes multiple take-profit levels at $38,000, $39,000, and $40,000 over a span of 1-3 weeks, maintaining a risk-to-reward ratio of 1:3. With a maximum profit potential of 7.5% and a capped loss at 2.4%, this approach proves attractive to traders employing technical analysis. Investors will closely watch Bitcoin’s price movements in the coming weeks based on these outlined strategic parameters.
BTC +7.20% |
ETH +10.01% |
LTCUSD +4.35% |
XMRUSD +2.66% |
United Kingdom: In the third quarter, the UK’s gross domestic product (GDP) met the Bank of England’s (BoE) forecast for zero growth, following growth of 0.2% in the preceding three months. Monthly GDP exceeded expectations, with a 0.2% expansion in September. However, GDP growth for August was revised downwards from 0.2% to 0.1%. The Office for National Statistics attributed the growth to increased activity in engineering, healthcare sales, and machinery leasing, offsetting declines in healthcare, management consultancy, and commercial property leasing. The BoE’s latest projections call for the inflation rate to halve by year-end, falling below the 2% target by the close of 2025, a revised timeframe. The BoE envisions minimal economic growth of 0.1% for the remainder of this year, with stagnation expected in 2024. The UK housing market remained subdued, recording the lowest mortgage approval level (43,328) in September, comparable to January.
Eurozone: Recent data continues to point to a sluggish European economy. Eurozone retail sales contracted by 0.3% in September, following a 0.7% decline in August. The Economic Sentiment Index, compiled by Sentix consultancy, improved to -18.6 in November from -21.9 in the previous month. In Germany, industrial production declined by 1.4% sequentially in September, after remaining flat in August, while manufacturing orders increased by a modest 0.2%, considerably lower than the 1.9% registered in the prior month. In France and Italy, industrial output remained steady in September compared to August.
United States: Economic data released this week was limited, and most in line with expectations. One exception was the University of Michigan’s preliminary gauge of consumer sentiment released on Friday, unexpectedly dropping to its lowest level in six months.
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