Global Stock Market Weekly Updates (7-11 Nov 2022)
Global Stock Market -Weekly Updates (7- 11 Nov 2022): The global stock market indexes cheered after the US inflation and bond yields fell last week. All major indexes in the US, Europe, Japan, and China made a superb rally at the end of the week.
The US Stock Market indexes- Weekly Updates
The US benchmark indices recorded strong gains after the release of CPI inflation data on Thursday. Investors bet on growth stocks-technology and internet-related stocks, as the bond yields fell after the cooling inflation rate.
The US Consumer Price Index (CPI) based inflation rose 0.4% in October, lesser than the expectation of 0.6% and bringing the YoY increase to 7.7%. Though the October inflation is still above the Federal Reserve’s target, it was the slowest increase since January. The market sentiments were also upbeat as the benchmark 10-year-old Treasury yields fell from 4.17% to 3.81% after the release of the inflation rate on Thursday.
The softer-than-expected inflation data raised hope among investors that the Fed may hike interest rates by 50 bps in December instead of the ongoing 75 bps hike. The other economic data released during the week was almost in line with the expectation. Earlier traders were nervous ahead of the mid-term election results which created some volatility in the markets on Tuesday and Wednesday.
European Stock Market Indexes- Weekly Updates
European stock market indexes closed higher on slowing inflation in the US. The positive quarterly earnings also boosted the market sentiments during the week. However, the upside remained capped as investors worried about the economic slowdown in the region.
The UK’s GDP fell by 0.2% sequentially in the third quarter, BoE already forecasted in September that the third quarter would be the start of a recession that could last for 2 years. The European Commission also predicted slower economic growth in 2023 and raised the inflation target. German reported stronger-than-expected Industrial production data for the month of September.
Weekly Updates- Japan
Japanese stock market index ended higher during the week, as the global sentiment improved due to the lower-than-expected US consumer price inflation in October. This has raised hope among investors that the US Fed could adopt a dovish monetary policy stance in December. The market sentiments got further boosted after some relaxation of the Zero-Covid policy in China on Friday.
Meanwhile, the Bank of Japan also indicated that it would retain its ultra-loose monetary policy to boost economic growth in the country. The Japan Tourism Agency aiming for post-coronavirus recovery outlines a plan for 2025. The Japanese government announced a new investment plan in semiconductor development and production, looking to remain a key player in global technology.
Weekly Updates- China
China’s Shanghai also rose during the week following the optimistic global sentiments. The sentiments were upbeat on the final day of the week as China’s government finally announced to relaxation of its Zero-Covid policy. Although Chinese officials said that the policy remained firmly in place, the government announced on Friday afternoon reductions in the mandatory quarantine time for inbound travelers as well as testing requirements.
The Economic data announced during the week were mixed as Exports fell for the first time in two years in October while the producer price inflation also fell in October, its first decline in nearly two years.
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