A peaceful start of the week
The current week has started rather calmly, and most probably there won’t be any dramatic changes up until Wednesday. But on Wednesday, all the European countries and the USA are getting the business activity report. This report may influence the ECB and Fed monetary policy expectations. The thing is that a rapid decline in business activity in manufacture and services would indicate the considerable economy slow down. Consequently, the aggressive key rate policy becomes riskier.
Currently this isn’t the main scenario. There’s a chance, the current week would be rather quite. What’s more, it is a shorter week for the US market, as the Thanksgiving Day is this Thursday. The markets will be closed reducing the liquidity and probably even the volatility.
Last week leaders and outsiders
DAX:
Top: Mercedes Benz Group AG +3.32%, MTU Aero Engines AG +3.18%, Fresenius SE & Co. KGaA +2.62%
Flop: Zalando SE -3.26%, SAP SE -2.34%, PUMA SE -0.39%
EURO STOXX 50:
Top: PADDY POWER PLC +2.43%, Inditex +1.91%, Banco Santander S.A +1.66%
Flop: Philips Electronics N.V. -2.4%, PROSUS NV EO -1.07%, ASML Holding N.V. -1.06%
Dow Jones (us 30):
Top: Cisco Systems Inc. +3.86%, Verizon Communications Inc. +2.48%, IBM Corp. +2.39%
Flop: salesforce.com Inc. -1.81%, Microsoft Corp. -0.81%, Walgreens Boots Alliance Inc. -0.53%
You could have noticed the leaders and outsiders composing the DAX index did not have much change. Mercedes Benz Group AG and MTU Aero Engines AG remain the leaders by their growth, while a big retail company Zalando SE has stayed in red for the whole week. Also we see that PUMA SE and Adidas AG have some problems, which is a marker of instability in this sector.
Bond market:
There still aren’t clear signs of growth of the 10-year yields profitability, since ECB and Fed are getting ready for the key rate policy slow down, even though it might remain at a high level for a long time. The absence of growth in the profitability indicates at an elevated probability of the key rate policy slow down. It is also important to consider that it might happen in case of the financial situation get worse. Thus, one should not rely on considerable growth of the bond market.
Oil market
The last week proved to be the worst for oil market in a while. The obvious reason is the COVID restrictions in China. One should also take into account the previous wave of oil quotes growth, as recently there have been a lot of rumors regarding the lockdown restrictions being taken off, which pushed the oil quotes higher up.
Though the problems in China mean the prices would go down, the OPEC+ can still intervene, protecting the market from a powerful decline, that’s why one should keep an eye on the OPEC reports.
