Fundamental And Technical Analysis Report – 08 December 2022

08 Dec 2022

Oil surges even as U.S. inventories decline, but recession worries continue

Asian stock market closes in red on Wednesday. The Shanghai Composite is up 0.14% at 3199.62 Overall, the Singapore MSCI is down 0.22% at 292.65. Over in Hong Kong, the Hang Seng Index is down 2.80% at 18814.82. In Japan, the Nikkei 225 is down 0.47% at 27686.40, while the Topix index is down 0.33% at 1948.31 South Korea’s Kospi is down 0.80% at 2382.81. Australia S&P/ASX 200 is down 0.64% at 7229.40.

Top News of the Day:

Oil prices rose on Thursday as data showed U.S. inventories shrank at a faster-than-expected rate, although rampant fears of a recession dimmed the outlook for crude markets after causing sharp losses this week.

An increasing number of market participants warned that high U.S. inflation and rising interest rates could bring about a recession in 2023, with economic growth expected to cool significantly from current levels.

This dulled sentiment towards crude, pushing prices to their weakest levels this year. But markets took some relief from data showing U.S. inventories shrank more than expected in the week to December 2, signalling some near-term tightening in the country’s crude supply.

China, the world’s largest crude importer, announced the relaxing of more COVID-related restrictions this week- a move that is eventually expected to help support global oil demand.

The country is reconsidering its strict zero-COVID policy amid a wave of unprecedented public protests against the policy, as well as deteriorating economic growth.

While U.S. crude inventories shrank more than expected, production surged to its highest level since August, a move that is likely to offset tightening supply.

Market Summary as per 7/12/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded down 0.57% at 14261.19, CAC 40 futures down 0.41% at 6660.59. UK 100 futures contract in the U.K. down 0.43 at 7489.19

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed flat 0.00% at 33597.92. The S&P 500 down 0.19% at 3933.92 and the Nasdaq 100 down 0.51% at 10958.55, NYSE closes 0.11% down at 15311.80.

Top Market News Today:

In the Forex market, GBPUSD down 0.12% at 1.2185. The USDJPY up 0.28% at 137.00, The USDCHF up 0.14 at 0.9419. EURUSD down 0.04% at 1.0500. EUR/GBP up 0.10% at 0.8619. The USD/CNY up 0.02% at 6.9748 at the time of writing.

In the Commodity market U.S. Gold futures down at 0.17% $1,783.08. Elsewhere, Silver futures down 0.48% at $22.611 per ounce, Platinum up 0.32% at $1006.45. per ounce, and Palladium up 0.56% at $1855.15.

Brent Crude Oil up 0.84% at $77.81 per barrel.

In the Cryptocurrency Markets, Bitcoin at 16814.90 down 0.14%, Ethereum down 0.28% at 1227.73, Litecoin at 75.19 down 75.19%, at the time of writing.

Top Market Segment to Watch Out Today:

Gaming Stop (GME): – the embattled videogame retailer with the heavily shorted stock, surprised the market with what appears to be a large round of layoffs. Interestingly, GameStop has not independently confirmed the extent of the layoffs, and all news outlets reporting on the event are simply reading the tea leaves from a dozen or so announcements from employees on the LinkedIn social network. The news is fascinating since GameStop is scheduled to deliver third quarter earnings results after the market close on Wednesday.

GameStop stock is trading up 0.5% in premarket.

Economic News:

US: U.S. anti-corruption groups are pushing Congress to attach sweeping new money-laundering rules to a year-end bill funding the government that lawmakers aim to pass in the coming weeks, according to aides and lobbyists.

The bipartisan measure, known as the ENABLERS Act, got a boost this week when the White House publicly came out in support of the bill.

“It’s going to really matter that the administration makes absolutely clear that this is a genuine serious priority for them,” Democratic Senator Sheldon Whitehouse, one of the bill’s main sponsors, said on Wednesday.

The measure would require professionals who handle money on behalf of clients – including investment managers and some lawyers – to conduct due diligence on the funds’ origins, as banks are typically required to do.

Boosters and opponents say the measure would be the most ambitious overhaul of the nation’s money laundering framework in at least 20 years.

“The ENABLERS Act is the U.S. anti-corruption community’s top priority right now,” said Scott Greytak, director of advocacy at Transparency International’s U.S. branch.

Supporters said they hope to attach the measure to a $1.5 trillion-plus “omnibus” funding bill. The initial deadline for that is Dec. 16, though lawmakers could extend it through a short-term continuing resolution, a possibility which appears increasingly likely.

Euro Zone: – Britain’s labour market cooled noticeably last month, with demand for staff and pay growth easing, and staff shortages became less acute, a survey showed on Thursday.

The monthly index of demand for staff from the Recruitment and Employment Confederation (REC) trade body and accountants KPMG fell in November to 54.1 from 56.7 in October, the lowest reading since February 2021.

The survey’s gauges of starting salaries and pay rates for permanent and temporary workers also fell to their lowest levels in around a year and a half. The hiring of permanent staff declined for a second month running.

The survey, watched closely by the Bank of England as a leading indicator of the labour market ahead of its interest rate decision next week, matched other signs that the economy is slowing.

“This month’s data emphasises that while employers are moderately more cautious in the face of economic uncertainty, this is not yet a major slowdown in hiring,” REC Chief Executive Neil Carberry said.

“A flatter period in the labour market is inevitable in this current economic climate, but demand is being supported by some major underlying factors, including labour shortages and technological change,” he added.

Last month BoE Governor Andrew Bailey said Britain’s “very tight” labour market was a key reason why further interest rate increases were likely.

Top Economic Releases Today:

USD: Initial Jobless Claims Forecast 230K, Previous 225K at 19:00
EUR: ECB President Lagarde Speaks at 23:30
JPY: GDP (QoQ) (Q3) Actual –0.2%, Forecast -0.3%, Previous 0.1% at 05:20
AUD: Trade Balance (Oct) Actual 12.217B, Forecast 12.100B, Previous 12.444B at 06:00
CAD: BoC Deputy Gov Kozicki Speaks at 23:15