Market Monitor - 15 October 2021
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Market Monitor – 15 October 2021

Stock markets around the world have made solid gains this week as recent fears over rising inflation and global supply chain blockages have receded. Investors have focused on strong earnings reports by a number of major companies – in the United States in particular – as well as some improved economic data.
Concerns over sharp increases in energy prices in recent weeks seem to have also fallen back, although there were signs on Thursday that natural gas prices in Europe could be about to spike again.

The US

On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 0.5% up for the week so far, with the S&P 500 1.1% ahead. Shares in the US finished the week strongly, with the S&P enjoying its best day since March on Thursday, posting a 1.7% gain.
This surge was underpinned by strong earnings reports in the American financial sector, with the likes of Bank of America and Morgan Stanley surpassing analysts’ expectations with strong results and bullish trading statements.
The latest jobless data in the US also gave cause for cheer, with ongoing unemployment claims falling more steeply than expected to a new Covid-era low. Investors see this as a sign that the structural problems in the American jobs market – where businesses have struggled to find sufficient staff to help meet rising customer demand – are starting to be addressed.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 1.6% up for the week, lifted by optimism on the other side of the Atlantic as well as by some good news domestically. Two members of the Bank of England’s Monetary Policy Committee reportedly downplayed the chances of an imminent increase in interest rates, saying instead that they and their colleagues should instead wait to see how the current surge in input costs plays out.

Meanwhile, a government minister said that the likelihood of a mild winter in Britain could help save the country from the worst effects of the ongoing energy crisis. Recent rises in oil and gas prices have raised the possibility that some manufacturers may be forced to suspend production for periods during the colder months – a move that would add considerably to the UK’s current supply chain problems.

In Frankfurt, the DAX index ended Thursday’s session up 1.7% for the week, while France’s CAC 40 gained 2%. Eurozone investors were buoyed by falling gas prices earlier in the week, although economic data continues to provoke concern.
In Germany, economic sentiment has been hit hard by the supply chain crisis, with investor confidence falling for a fifth successive month. Inflation in Germany, meanwhile, hit 4.1% in September – its highest rate in almost three decades.

Asia

In Asia, the Hang Seng index in Hong Kong rose 0.5%, extending last week’s gains. But the Chinese economy is still struggling with the after-effects of the pandemic, with factory-gate prices up more than 10% year-on-year last month and many producers being hit with temporary shutdown orders as a result of soaring energy costs. In Japan, the Nikkei 225 index posted a gain of 1.8% as it bounced back from the lows seen at the start of October.
October 8
October 14
Change (%)
FTSE 100
7095.6
7207.7
1.6
FTSE All-share
4046.7
4107.9
1.5
S&P 500
4391.3
4438.3
1.1
Dow Jones
34746.3
34912.6
0.5
DAX
15206.1
15462.7
1.7
CAC 40
6557.0
6685.2
2.0
ACWI
717.5
726.6
1.3
Hong Kong Hang Seng
24837.9
24962.6
0.5
Nikkei 225
28048.9
28550.9
1.8

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 14/20/2021.

15 October 2021
Mark King
Mark King
Head of Investment Content
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Market Monitor – 15 October 2021

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