On Friday the South African equity markets saw MiX Telematics Ltd. (MIX) being the biggest loser of the day with a -13.63% loss moving from R8.29 to close the day at R7.16, whilst Ellies Holdings Ltd. (ELI) saw a 25.00% gain moving from R0.20 to R0.25, making it the biggest winner in the equity market.
US Dollar Index spiked to 95.25 (new 16-mth high) on Friday. The consumer sentiment data (10-yr low) and JOLTS provided mixed views, with confidence plunging, 1-year inflation rising, and a slip in job openings, but a record 4.4 mln workers quitting their jobs.
Stocks hold higher after spike on Friday, amid strong earnings and dip buyers supported, along with a more calm trade in Treasuries. Asian markets also found buyer, Treasury futures re-open positively. China bourses struggled despite a stronger retail sales number.
Japan Q3 contracted -0.8% q/q, much more than anticipated -add to speculation that Kisihida, will provide a big stimulus package to support the economy.
US Yields (10yr trades at 1.55%, down 0.9bp after. Treasury yields have taken a break from their manic gains seen last week, supportive of the equity market, while hopes that inflation is temporary, and that supply chains will improve into the New Year have helped investor sentiment as well.
Equities steady to Friday’s highs, Dow +0.5%, NASDAQ led the way +1% USA500 +0.7%, Nikkei lifting 0.4%.
Big movers; TSLA dip -2.8% (Twitter spoke and Elon Sold, Musk has already offloaded a combined $6.9 billion), J&J +2%, Toshiba -1.0%, Disney -7%. (Disney’s streaming growth disappoints)
Johnson & Johnson: split of the company into two divisions, one being consumer health products, the other to focus on pharmaceuticals and medical devices. J&J’s shares are up 2% in early trade. Toshiba Corp. TOSYY 1.43% said it planned to split into three by March 2024 in response to shareholder pressure for a more-focused structure, following a similar path taken by fellow industrial conglomerate General Electric Co.
US-EU: agreed to end a festering dispute over US steel and aluminium tariffs imposed in 2018, removing a burden on transatlantic relations and averting a spike in EU retaliatory tariffs. – tariffs of 25% on steel and 10% aluminium, while allowing “limited volumes” of EU-produced metals into the United States duty-free.
USOil – slipped below $80.00, hit by a strengthening USD and speculation that Biden’s administration might release oil from the US Strategic Petroleum Reserve to cool prices.
Focus today: Virtual meeting Link between Chinese leader Xi Jinping and US President Joe Biden later in the day, with hopes of an easing in ongoing tensions across a range of issues including tariffs imposed on China under former President Donald Trump.
– Hotforex Market Analyst, Andria Pichidi
Things to watch today
Japan Gross Domestic Product (GDP) QoQ, China Industrial Production YoY, European Central Bank President Lagarde Speaks, India Wholesale Price Index (WPI) Inflation YoY, Chinese Unemployment Rate.
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