Markets Update Thursday 09/12/2021 – Waiting for Friday

Frankfurt – 09/12/2021

Waiting for Friday

The pre-Christmas stock rally has stopped for the time being. After three winning days in a row, the US stock markets ran out of steam. Concerns about measures needed to contain the new Corona variant Omikron dampened investor optimism.

In addition, investors were cautious ahead of the US inflation data due on Friday. If the price rise turns out to be higher again, speculation about an interest rate hike in the near future is likely to increase. According to Federal Reserve Chairman Jerome Powell, the economy is currently robust and inflationary pressures are high. Therefore, the central bank is considering reducing its bond purchases more quickly than planned a few weeks ago.

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Experts warn that the next few weeks could continue to be bumpy and volatile. 

US Markets at a glance

Investors on Wall Street played it safe today and took profits. The Dow Jones began Thursday’s trading 0.09 per cent weaker at 35,722.26 points but fought its way into the profit zone in the course of trading. However, the stock market barometer could not permanently defend the green terrain – the closing level was marked at 35,755.28 points and thus almost at the previous day’s level. The NASDAQ Composite tech index slipped more sharply in Thursday trading, losing 1.71 per cent to 15,517.37 points.

On Wall Street, worries about the new Corona mutation Omikron flared up again. Investors are hoping for more data on the severity of the variant on the effectiveness of currently available vaccines. The day before, BioNTech and Pfizer had announced study results showing the vaccine showed little efficacy after two doses but was effective with a third vaccination – the “booster”. However, the Omikron variant seems to only occur in vaccinated people in the first place.

US jobs data were due in premarket trading: Weekly initial claims for US unemployment benefits fell to the lowest level in 52 years.

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Far East Markets at a glance

The stock markets in Asia moved in different directions on Thursday. In Japan, the Nikkei slipped 0.47 per cent to 28,725.47 points by the close of trading. The Shanghai Composite in mainland China closed 0.98 per cent higher at 3,673.04 index points, while the Hang Seng leading index in Hong Kong gained 1.08 per cent to 24,254.86 units by the close of trade.

Consumer prices had risen less than expected in China, while producer prices had increased more than predicted.

European Markets at a glance

The European stock exchanges were in the red on Thursday. The EuroSTOXX 50 was slightly firmer at the opening of the trading session but then slipped and closed 0.59 per cent deeper at 4,208.30 points.

The DAX opened slightly higher but then also fell back. By the end of the day, it had fallen by 0.30 per cent to 15,639.26 points. The TecDAX gained somewhat at the start of trading and finally closed 0.02 per cent higher at 3,863.06 points.

On Thursday, several economic data were again on the agenda. Figures from Germany’s foreign trade were already presented before the start of trading: Although exports rose strongly in October, the data usually do not play a crucial role on the markets. In the USA, the weekly labour market data were on the agenda.

Forex, gold, oil and crypto

The euro came under renewed pressure this Thursday. At 1.1290 US dollars, the common currency was trading well below the 1.13 dollar mark in US trading. The greenback was strengthened above all by robust US labour market data. 

Speculation about a decline in demand weighed on oil prices. Brent crude fell by 0.7 per cent to 75.29 dollars per barrel. The price of an American West Texas Intermediate barrel also fell just below the 72 dollar mark. 

With the strengthening US dollar, precious metals also suffered. Gold lost over $10 to $1,773 per troy ounce. 

With investors leaving riskier asset classes, Bitcoin and most other cryptocurrencies also suffered today. Bitcoin ultimately slipped by 4.6 per cent to $48,000, while Ethereum dropped 5.2 per cent to $4,170. Similarly, Solana and Cardano lost around 5 per cent, while XRP gained 2.5 per cent to $0.88. 

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Corporate and world economic news

Economic data

The rise in producer prices has slowed somewhat after hitting a 26-year high in China. On the other hand, consumer prices have risen by the most since August 2020. The price index for manufacturers increased by 12.9 per cent in November, as the statistics office reported in Beijing on Thursday. In October, producer prices had risen by 13.5 per cent, the largest increase in 26 years. However, the increase in November was higher than experts had expected.

Labour costs in Germany rose moderately in the third quarter. As reported by the German Federal Statistical Office, they increased by 0.5 per cent compared to the previous quarter. Adjusted for calendar effects, they were 2.6 per cent above the last year’s level. Labour costs consist of gross earnings and non-wage labour costs and are reported in relation to hours worked. In the third quarter of 2021, gross earnings increased by 2.5 per cent in calendar-adjusted terms compared to the same quarter of the previous year, and non-wage labour costs increased by 3.0 per cent.

In October, the German economy increased its exports after persistent material bottlenecks and disrupted supply chains had caused declines in the previous two months. However, there were recent signs that these blockages were slowly easing. Exporters sold 4.1 per cent more abroad than in the previous month, adjusted for calendar and seasonal factors, versus 1.1 per cent expected. Compared to the same month last year, exports were 8.1 per cent higher. Imports rose by 5.0 per cent in October compared to the previous month. 

Weekly initial claims for US unemployment benefits fell to their lowest level in 52 years, reflecting tightness in the labour market as the economy recovers from the effects of the pandemic. Compared with the previous week, claims fell 43,000 to 184,000 in the week ended 4 December, according to the US Labor Department, which is the lowest level since the week ended 6 September 1969. Economists surveyed by Dow Jones Newswires had predicted a drop to 211,000. 

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