Weekly market update : Commentators don't call the shots on markets

11/19/2021 | 12:12pm
November 19
Weekly market update
intro Boosted by strong corporate results and solid macroeconomic data, financial markets have been chasing record highs this week, only to see them pull back on Friday, hampered by Covid fears. Risk aversion and volatility seems to be resurfacing for this clearing session, with the announcement of a generalized containment in Austria and the same scenario envisaged in Germany. However, strength in technology stocks pushed the Nasdaq to a record high. Markets could experience a more volatile end to the year.

Over the past week, the performances appear to be very mixed.

In Asia, the Hang Seng lost 1.1% over the last five days while the Shanghai Composite gained 0.9%. In Japan, the Nikkei gained 0.5%.

In Europe, the gains evaporated with Friday's session. The CAC40 recorded a weekly loss of 0.3%, the Dax gained 0.4% and the Footsie gave up 1.7%. For the peripheral countries of the euro zone, the red dominates. Italy is down 1.4%, Spain is down 3.6% and Portugal is down 4.5%.

At the time of writing, Wall Street is mixed. The Dow Jones is down 1.2% for the week, the S&P500 is broadly flat and the Nasdaq100 is still up 2.5%.


Bad news is piling up on oil markets and weighing on the trend. After the downward revision of global demand forecasts by the International Energy Agency and the US threat to draw on its strategic reserves, operators must now face the consequences of a potential new containment in Europe after Austria's decision to reconfine its population. Oil prices have thus taken the path of decline this week, with Brent crude falling to nearly $78 per barrel, compared to $75.8 for the U.S. reference.
The rise in the greenback weighed on the industrial metals segment, which, like oil, fell this week despite better-than-expected Chinese statistics on industrial production and retail sales in October.

Copper is trading at USD 9450 per metric ton, while nickel has fallen to USD 19200. Gold stabilized around USD 1860, but did not benefit from the renewed nervousness of equity markets.

In soft commodities, lumber is back in the news. The floods in western Canada are blocking the flow of lumber to the United States, which is literally causing the price of building materials to soar by nearly 40% in five days.

Equity markets

Roblox (+20%): the video game creation platform has returned to the center of attention for being closely associated with the Metaverse. In a study, Morgan Stanley mentioned the potential of luxury brands in this parallel universe, explaining that they are already talking to platforms like Roblox, "where 'one in five gamers update their avatars daily. Nike announced the development of its own virtual world, "Nikeland", on Roblox.

IONQ (+ 45.2%), the quantum computing specialist has already exceeded its revenue estimate for the year and is therefore raising its outlook (for the 2nd time in 2 months). for this youngster born from a SPAC

Macy's (+ 21%) is reborn. The department store group is reporting strong quarterly sales and margins, says it has anticipated logistics issues well and plans to spin off its e-commerce business in 2022.

Hermès (+13%): exceptional week for the saddler, after J.P. Morgan raised the possibility of an entry into the EuroStoxx50 index at the December review, at the expense of Flutter. Index operator Qontigo is scheduled to announce any changes on December 1 post-close, for implementation on December 20.

Splunk (-15%): the resignation of the group's CEO, Doug Merritt, sank the stock, despite the publication of a quarterly revenue slightly above expectations.


Coronavirus has once again been in the news, breaking the bullish momentum of markets. The announcement of a lockdown in Austria and the rise of positive cases in several other European countries, including Germany, led to a lot of movement on Friday, particularly on the euro, which fell sharply, breaking the USD 1.13 threshold in the process, the lowest since July 2020. Oil also fell sharply, accentuating its downward trend of recent days. The single currency also fell to CHF 1.0452, although the Swiss Confederation is not necessarily better off than its neighbors. For the week, the pound sterling rose to EUR 1.19138, as inflation in the UK strengthened.

In the debt market, the resurgence of Covid fears pushed bond yields down on the grounds that central banks may have to put the pedal to the metal on their plans to reduce their support policies. Over 10 years, the Bund yielded -0.34% (-6 points) and the T-Bond 1.53% (-6 points).

On the side of cryptocurrencies, the market seems to be feverish, falling by 10% this week, bringing the total market capitalization to $ 2.5 trillion. Bitcoin, meanwhile, is losing more than $10,000 from last week's high, hinting at a potentially eventful end to the year for digital assets.

Meanwhile, weekly statistics, while sparse, were solid. In the US, consumers spent more than expected and industrial production accelerated beyond expectations in October.

Next week, Tuesday will be marked by the release of the November flash PMIs for the major economies. These measure business confidence and as such are very good leading indicators of economic activity. In the US, a new estimate of Q3 GDP, the latest durable goods orders and PCE inflation will make up a busy schedule for next Thursday's session.

Commentators don't call the shots on markets

Apart from a little heckling in the last two days, the main Western indices continued to break records this week on the back of good quarterly results. The absence of macroeconomic indicators did not disturb the irresistible rise of indexes. Despite the most skeptical comments about the exponential rise of markets, they seem to want to do as they please. Corporate profitability has never been so high, supported by central banks and the economic recovery. Next week, the Chicago Fed's activity index will be published on Monday, as well as the evolution of sales of old houses in the United States, and the PMI of the main developed countries on Tuesday.
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