Morning Update Note
Wednesday 1st December 2021
- Wall Street stocks closed lower on Tuesday as concerns regarding the Covid-19 omicron variant resurfaced.
- At the close, the Dow Jones Industrial Average was down 1.86%at 34,483.72 and the S&P 500 was 1.90% weaker at 4,567.00, while the Nasdaq Composite saw out the session 1.55% softer at 15,537.69.
- In addition to stocks trading lower on the news, with travel stocks trading lower after yesterday’s rebound and shares in pharmaceutical companies also feeling the heat, the yield on the benchmark 10-year Treasury note fell to 1.443%.
- On the macro front, September’s house price index rose to 354.6 in September from 351.5 in August, a 0.9% month-on-month rise, while S&P/Case Shiller’s home price index showed prices rising at a year-on-year pace of 19.1% in September, just shy of the expected pace of 19.3% and a slightly lower than August’s year-on-year rate of 19.6%.
- Elsewhere, the Chicago PMI slumped to its lowest reading in nine months in November, hitting 61.8 from 68.4 in October, driven by a slow-down in new orders.
- Lastly, the Conference Board’s consumer confidence report also sank to a nine-month low in November, falling to 109.5 from 113.8 in October, a steeper decline than the 111.0 expected by analysts.
- European shares were unable to hold onto the previous day’s timid bounce after the head of drug company Moderna said existing Covid vaccines may struggle to combat the Omicron variant of the SARS-CoV-2 virus.
- The pan-European Stoxx 600 index retreated 0.92% to 462.96 on the last day of the month with all major regional bourses on the same path.
- Germany’s Dax gave back 1.18% to 15,100.13 while Spain’s Inex 35 shed 1.78% to 8,305.1.
- The FTSE 100 closed down 0.7% at 7,059.45.
- In equity markets, British Airways and Iberia owner IAG flew lower, while shopping centre owners British Land and Land Securities also fell amid concerns about how the new variant and any potential restrictions could affect their performance.
- Budget airline easyJet was also down even after it reported a better-than-expected annual loss and said it expected capacity to return to pre-pandemic levels by the end of the current fiscal year.
- Micro Focus slumped after saying it was targeting up to $500m of cost cuts and at least flat revenue by the end of 2023 as the company seeks to turn its business round.
- On the upside, miners Anglo American and BHP both gained as metals prices advanced.
- Markets in Asia-Pacific reversed the losses in the previous session today as markets waited on further information regarding the omicron variant.
- In Japan, the Nikkei 225 gained 0.41%.
- On mainland China, the Shanghai Composite was up 0.36%
- The Hang Seng index in Hong Kong was up 0.73% while Australia’s ASX 200 edged 0.28% lower.
- Over in South Korea, the Kospi rose 2.14%.
- 10yr and 30yr US treasuries are currently trading at 1.48% and 1.82% respectively.
- 10yr UK gilts trade with a yield of 0.84%.
- German 10yr bund yields trade at -0.32%.
- 10yr Italian and Spanish bond yields trade at 1.00% and 0.43% respectively.
- The WTI crude oil price is $68.56
- Brent crude is $70.57
- The gold price is $1,781.60
- The silver price is $22.98
- The COMEX copper price is $4.33
– One pound buys:
- 1.33 USD
- 1.17 EUR
– One dollar buys:
- 113.43 JPY