FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 14 October 2022

14 Oct 2022

STOCKS MAY BE LESS BULLISH AFTER FUNDAMENTAL UNCHANGED

Asia Pacific stocks surged on Friday. The Shanghai Composite is up 1.84% at 3,071.38. Overall, the Singapore MSCI is up 0.04% at 274.45. Over in Hong Kong, the Hang Seng Index is up 2.80% at 16,865.00. In Japan, the Nikkei 225 is up 3.51% at 27,140.00, while the Topix index is up 3.06% at 1901.50. South Korea’s Kospi is up 2.28% at 2,212.13. Australia S&P/ASX 200 up 1.75% at 6758.80.

Top News of the Day:

An eye-popping turnaround in stocks may be less bullish than hoped for, with traders saying short-term hedging activity buoyed equities while leaving the market’s grim fundamentals unchanged.

Data showing consumer prices rose more than expected in September initially sent the S&P 500 tumbling to its lowest point since November 2020 on Thursday, only for the index to mount a furious rally towards midday. In total, the index swung 5.4 percentage points on the day to close up 2.6%.

Market Summary as per 13/10/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 1.51% at 12,355.58, CAC 40 futures up 1.04% at 5879.20 and the UK 100 futures contract in the U.K. up 0.35% at 6850.28.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 2.83% at 30038.73. The S&P 500 up 2.60% at 3699.89 and the Nasdaq 100 up 2.30% at 11033.58, NYSE closes up 2.53% at 13888.96.

Top Market News Today:

In the Forex market, GBPUSD up 0.03% at 1.1318. The USDJPY up 0.14% at 147.422. The USDCHF down 0.32% at 0.9973. EURUSD up 0.14% at 0.9789, EUR/GBP up 0.27% at 0.8647. The USD/CNY up 0.01% at 7.1711 at the time of writing.

In the Commodity market U.S. Gold futures up 0.29% at $1,670.85. Elsewhere, Silver futures up 0.91% at $19.031 per ounce, Platinum up 1.85% at $908.98 per ounce, and Palladium up 1.24% at $2133.72.

Crude Oil up on Friday; Brent Crude Oil up 0.18% at $94.75 per barrel while U.S. West Texas Intermediate (CLc1) up 0.20% at $88.24.

In the Cryptocurrency Markets, Bitcoin at 19815.00 up 2.35%, Ethereum up 3.06% at 1327.00, Litecoin at 52.14 up 1.80%, at the time of writing.

Top Market Segment to Watch Out Today:

GOLD: Gold prices fell on Friday and were set to close the week lower amid fears of more interest rate hikes by the Federal Reserve, while signs of tightening supply helped copper and aluminium prices weather a worsening economic outlook.

Economic News:

US: International Monetary Fund Managing Director Kristalina Georgieva on Thursday rebuked the British government over its planned tax cuts, telling its finance minister and central bank chief that their policies should not be contradictory.

Her comments during the IMF and World Bank annual meetings in Washington highlighted concerns about financial market turmoil triggered by Britain’s proposed “mini-budget” of increased spending and tax cuts that were threatening to overshadow bigger economic challenges, such as the fight against inflation and the impact of the war in Ukraine.

Georgieva told a news conference that she discussed with British finance minister Kwasi Kwarteng and Bank of England Governor Andrew Bailey the need for “policy coherence and communicating clearly … so in this jittery environment there would be no reasons for more jitters.”

The IMF chief said that any recalibration of policies should be led by evidence. And right now, the evidence points to the need for governments to keep up their fight against inflation, even though doing so increases the risk of a global recession.

Euro Zone: European Central Bank policymakers discussed earlier this month a detailed timeline for running down a 3.3 trillion-euro bond portfolio and envisioned the start of quantitative tightening sometime in the second quarter of 2023, sources told Reuters.

The ECB could already tweak its language on reinvestments at its October meeting and then could provide a detailed plan possibly in December but more likely in February, according to three sources who spoke on condition of anonymity.

The central bank is sitting on 3.3 trillion euros of debt in its Asset Purchase Programme and has so far said that all cash maturing in this scheme would be reinvested for an extended period of time beyond the first interest rate hike.

But the rate hikes already have started and the benchmark rate could hit 2% by the end of the year, so reinvestments will also need to come to a close.

Top Economic Releases Today:

U.S. Retail Sales (MoM) (Sep) today at 08:30 this time estimated 0.20%, previously which was 0.30%.
30 this time estimated -1.80%, previously which was -0.90%.
EURO ZONE Trade Balance (Aug) today at 05:00 previously which was -34.0B.

JAPAN 5-Year JGB Auction today at 01:00 previously which was 00.04%.
U.S. Business Inventories (MoM) (Aug) today at 10:00 this time estimated 0.9%, previously which was 0.6%.