Fundamental And Technical Analysis Report – 12 December 2022

12 Dec 2022

The loosening of COVID has caused new concerns for businesses in Wuhan, China

Asian stock market closes in green on Friday. The Shanghai Composite is up 0.30% at 3206.95 Overall, the Singapore MSCI is up 0.84% at 295.20. Over in Hong Kong, the Hang Seng Index is up 2.32% at 19900.87. In Japan, the Nikkei 225 is up 1.18% at 27901.01, while the Topix index is up 1.03% at 1961.56 South Korea’s Kospi is up 0.76% at 2389.04. Australia S&P/ASX 200 up 0.53% at 7213.20.

Top News of the Day:

Infections are delivering a fresh kick in the teeth for many small businesses in China’s central city of Wuhan, despite the easing of most stringent curbs last week.

With the sick and those fearing infection keeping to their homes, hopes of brighter prospects after the end of lockdowns are evaporating, at least for now, with the government showing few signs of stepping in to help.

“I simply can’t go on,” said Zhu Chongqing, 60, as he looked around his empty restaurant, which dishes up regional cuisine in the city of 11 million where the COVID-19 pandemic began three years ago.

“I’m losing money every day, a thousand yuan a day.”

The challenge for small businessmen like Zhu spotlights how Beijing’s shift away from tough COVID policies, with the promise of driving an economic recovery next year, is likely instead to depress growth over the next few months as infections surge.

Business on what would normally be a buzzing food street, where most restaurants were shut or empty last Saturday, is the worst it has been since Zhu first opened his doors to customers 30 years ago, he added, looking forlorn.

Market Summary as per 9/12/2022:

European equities Friday closing. The DAX futures contract in Germany traded up 0.74% at 14370.72, CAC 40 futures up 0.40% at 6677.64. UK 100 futures contract in the U.K. up 0.06 at 7476.63

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.90% at 33476.46. The S&P 500 down 0.73% at 3934.38 and the Nasdaq 100 down 0.70% at 11004.62, NYSE closes 0.71% down at 15291.05.

Top Market News Today:

In the Forex market, GBPUSD down 0.31% at 1.2226. The USDJPY up 0.18% at 136.82, The USDCHF down 0.19 at 0.9346. EURUSD down 0.12% at 1.0520. EUR/GBP down 0.56% at 0.8576. The USD/CNY down 0.13% at 6.9559 at the time of writing.

In the Commodity market U.S. Gold futures down at 0.46% $1,788.86. Elsewhere, Silver futures down 0.19% at $23.40 per ounce, Platinum down 0.73% at $1016.00. per ounce, and Palladium down 1.18% at $1928.00.

Brent Crude Oil up 0.53% at $76.50 per barrel.

In the Cryptocurrency Markets, Bitcoin at 16941.80 down at 0.84%, Ethereum down 1.22% at 1247.47, Litecoin at 73.94 down 3.36%, at the time of writing.

Top Market Segment to Watch Out for Today:

NVidia (NVDA): – stock is rising in Friday’s premarket a day after it closed up a hefty 6.5% on more news that the Federal Reserve’s interest rate hiking is beginning to deliver results. NVDA shares closed at $171.69 on Thursday after the US Labour Department reported that continuing jobless claims for November 25 rose by 62,000 to 1.67 million. Additionally, initial jobless claims for the week ending December 2 rose 4,000 to 230,000, which was in line with consensus.

Economic News:

US: U.S. Treasury Secretary Janet Yellen on Sunday forecasted a substantial reduction in U.S. inflation in 2023, barring an unexpected shock.

“I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,” she told CBS’ ’60 Minutes’ in an interview released Sunday.

Asked about the likelihood of recession, the former Federal Reserve chair said, “There’s a risk of a recession. But … it certainly isn’t, in my view, something that is necessary to bring inflation down.”

Yellen’s comment came days before the Fed is expected to slow the aggressive pace of interest rate increases it has pursued this year. Fed Chair Jerome Powell has telegraphed a more minor, half-of-a-percentage point increase in the policy rate, to a range of 4.25%-4.5%, after four 75-basis point hikes this year.

Yellen told CBS that economic growth was slowing substantially, inflation was easing and she remained hopeful that the labor market would remain healthy.

She said she hoped the spike in inflation seen this year would be short-lived and said the U.S. government had learned “lotto lessons” about the need to curtail inflation after the high prices seen in the 1970s.

Shipping costs had come down and long delivery lags had eased, while gasoline prices at the pump were “way down.”

Euro Zone: –

British Conservative politicians on Sunday launched two campaigns to address concerns about the direction of the party and the government, the latest challenge to new Prime Minister Rishi Sunak’s attempts to unite a fractured party.

The Conservative Party has already ousted two prime ministers in 2022 – Boris Johnson and Liz Truss – and trails the opposition Labour party in the polls by double digits, with another national election expected in 2024.

Sunak became prime minister in October when Truss resigned after less than two months. Her chaotic tenure was fatally damaged when her fiscal plan for unfunded tax cuts lost the confidence of markets.

Sunak has reversed those plans and instead raised taxes, reassuring financial markets, but upsetting some Conservative lawmakers.

“In the recent budget, the government decided to tax the British public at levels not seen since the end of the Second World War,” a group of 40 Conservative lawmakers wrote to finance minister Jeremy Hunt on Sunday.

“We need to be able to reassure our constituents, who are worried about the cost-of-living crisis, that every penny of taxpayers’ money spent on their behalf provides value for money and is not wasted.”

The group, which calls itself Conservative Way Forward, said it would publish a report on Monday outlining 7 billion pounds ($8.58 billion) of “waste” that could be shed, allowing the government to cut taxes or spend more on frontline services.

Sunak’s first six weeks as prime minister have been calmer than his predecessor’s, but restive backbench lawmakers have already forced policy concessions on housebuilding targets and onshore wind farms.

He is also having to deal with the impact of surging energy bills, a cost-of-living crisis, and industrial action set to disrupt hospitals and transport in the run-up to Christmas.

Top Economic Releases Today:

USD: 10-Year Note Auction, Previous 4.140% at 23:30
GBP: GDP (MoM) Forecast 0.4%, Previous –0.6% at 12:30
GBP: GDP (QoQ) Forecast –0.2%, Previous 0.2% at 12:30
GBP: Manufacturing Production (MoM) (Oct) Forecast 0.1%, Previous –1.1% at 12:30
EUR: French Non-Farm Payrolls (QoQ) (Q3) Previous 0.5% at 13:00