FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT – 27 DECEMBER 2022

27 Dec 2022

Oil prices rise as China eases COVID curbs, U.S. storm fuels supply worries

Asian stock market closes in green on Monday. The Shanghai Composite is up 0.98% at 3065.56. Overall, the Singapore MSCI is down 0.31% at 290.18. Over in Hong Kong, the Hang Seng Index is up 0.44% at 19679.22. In Japan, the Nikkei 225 is up 0.16% at 26405.87. While the Topix index is up 0.40% at 1902.52 South Korea’s Kospi is up 0.68% at 2317.14. Australia S&P/ASX 200 is down 0.63% at 7152.50.

Top News of the Day:-

Oil prices rose to three-week highs on Tuesday as China’s latest easing of COVID-19 restrictions spurred fuel demand hopes, while concerns that winter storms across the United States are affecting energy production continued to support prices.

British and U.S. markets were closed on Monday for the Christmas holiday.

China will end its quarantine requirements for inbound travelers starting on Jan. 8, the National Health Commission said on Monday, dropping a rule in place since the start of the pandemic three years ago. That raised optimism of higher demand from the top crude oil importer.

“Oil demand recovery is in sight for China, which is great news for the refining sector,” said Serena Huang, head of APAC analysis at Vortex.

The greenback softened after China said it would drop its quarantine rule. A weaker dollar makes oil cheaper for holders of other currencies.

Oil prices are also drawing support from worries about supply disruption due to winter storms in the United States, said Kazuhiko Saito, chief analyst at Fujitani Securities Co Ltd. The concerns “prompted buying, though trade was thin as many market participants were away on holiday”, Saito added.

Market Summary as of 26/12/2022:

European equities Monday closing. The DAX futures contract in Germany traded up 0.19% at 13940.93, and CAC 40 futures were down 0.20% at 6504.90. UK 100 futures contract in the U.K. is up 0.05 at 7473.01

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.53% at 33203.93. The S&P 500 is up 0.59% at 3844.82 and the Nasdaq 100 is up 0.21% at 10497.46, NYSE closes 0.71% up at 15188.45.

Top Market News Today:

In the Forex market, GBPUSD is up 0.23% at 1.2080. The USDJPY is up 0.12% at 133.02, and The USDCHF is up 0.05 at 0.9315. EURUSD up 0.13% at 1.0647. EUR/GBP is up 0.03% at 0.8812. The USD/CNY is up 0.06% at 6.9655 at the time of writing.

In the Commodity market U.S. Gold futures are up at 0.51% $1,807.16. Elsewhere, Silver futures are up 1.85% at $24.16 per ounce, Platinum up 0.80% at $1028.59 per ounce, and Palladium up 1.07% at $1774.28.

Brent Crude Oil is down 0.19% at $84.33 per barrel.

In the Cryptocurrency Markets, Bitcoin was at 16845.20 down 0.43%, Ethereum was down 0.77% at 1218.18, and Litecoin was at 70.10 down 0.93%, at the time of writing.

Top Market Segment to Watch Out for Today:

OIL: – Oil prices rose to three-week highs on Tuesday as China’s latest easing of COVID-19 restrictions spurred fuel demand hopes, while concerns that winter storms across the United States are affecting energy production continued to support prices.

Economic News:–

US: – Cathie Wood’s ARK Innovation Fund, which more than doubled during the pandemic rally, is on pace to finish near the very bottom of all U.S. mutual funds in 2022 after surging inflation and higher interest rates dried up an appetite for high-growth shares.

The ARK Innovation Fund has lost around 67% year to date, more than tripling the decline of the S&P 500 index. Its tumble has made it the worst-performing among all 537 U.S. mid-cap growth funds and put it near the bottom of all U.S. equity funds tracked by Morningstar, according to the firm’s Dec. 16 ranking.

With the S&P 500 on pace for its biggest annual decline since the Great Financial Crisis, few funds are likely to escape 2022 unscathed. Stock portfolio managers trailed their benchmarks by 0.6% this year, leaving most behind the 19% drop in the S&P 500 for the year to date or the nearly 22% decline in the Russell 2000.

“Portfolio managers got it wrong on inflation this year, and you could also say that the Fed got it wrong on inflation,” said Brian Jacobsen, senior investment strategist at All spring Global Investments.

Wood’s fund ranked 3,544 among all 3552 actively-managed U.S. equity mutual funds tracked by Morningstar. The worst-performing fund of the year, by comparison, was the Voya Russia fund, which is down 92% for the year to date.

The high-growth companies favored by Wood have fared especially badly as the Federal Reserve’s rate increases lifted bond yields, dulling the allure of high-growth stocks.

Euro Zone: –

Inflation is likely to remain high for another two years as companies pass on higher input costs and in some cases exaggerate them, the head of the council of economists that advises the German government was quoted as saying on Saturday.

Russia’s invasion of Ukraine has further stoked already rising costs for food and energy, pushing inflation in Germany to its fastest pace since the early 1950s, with consumer price rises of around 11.3% in November.

The Bundesbank has warned that even a planned price cap on gas and electricity may not be enough to bring inflation down from double digits.

“Inflation will also be an issue in 2024, and only after that will we see it returning to 2%,” Monika Schnitzer, the head of the so-called “wise men”, was quoted as saying by the Rheinische Post newspaper.

“Inflation is remaining high because we are seeing second-round effects, with companies passing on their higher costs – and some significantly exaggerating.”

She said she was not concerned about a wage-price spiral given measured wage rises in the chemistry and metal industries.

Workers in those industries agreed to what will likely prove to be below-inflation pay increases in return for one-off compensation payments.

She was concerned about high electricity prices, saying the government should urgently check whether it would make sense to let the remaining three nuclear plants run for two or three years longer than planned.

“It would make sense to quickly order new fuel rods now, that would give us more security next winter,” she said.

Europe’s biggest economy had planned to phase out nuclear power by the end of this year but the government decided in October to extend the lifespans of the remaining three plants until April given the current energy crisis. Some members of the government would like to see their lifespan extended further.

Top Economic Releases Today:

USD: Goods Trade Balance (Nov) Forecast –96.90B, Previous –98.80B at 19:00
USD: 2-Year Note Auction Previous 4.505% at 23:30
JPY: Retail Sales (YoY) (Nov) Actual 2.6%, Forecast 3.7%, Previous 4.4% at 05:20
JPY: BoJ Core CPI (YoY) Actual 2.9%, Forecast 2.8%, Previous 2.7% at 10:30
USD: Retail Inventories Ex Auto (Nov) previous –0.5% at 19:00