Daily Digest: Thursday 7th November
Equities
Momentum cooled in Japan through Thursday as the Nikkei 225 (¥N225) prices shifted to the downside, the nation’s benchmark index fell 99.26 points (0.25%) to 39,381.41. Chinese equities have continued to rally in the face of potentially stricter US import restrictions under President Trump in January, extending yesterday’s gains. The Shanghai Composite (¥SSE) jumped a further 86.85 points (2.57%) to 3,470.66, as the index charges toward its all time highs.
In the UK, the headline economic development was the conclusion of the BOE’s November monetary policy meeting, as members voted to lower interest rates by 25bps to 4.75%, in line with analyst expectations. On paper, this move should have a positive effect on the performance of UK listed equities, as the monetary policy committee voted 8-1 in favour of lowering rates based on weakening inflation data. However, throwing overly simplistic theory aside, the FTSE 100 (FTSE) actually continued lower, falling 25.94 points (0.32%) to 8,140.74. This may in part be due to UK investors factoring in a continuation of the rate cutting cycle based upon analyst expectations. Meanwhile, on the continent, the Pan-European STOXX 600 (STOXX) rose 3.14 points (0.62%) to 509.9, erasing yesterday’s losses.
US traders were faced with a second major event of the week in the form of the Fed’s November interest rate decision. The Fed’s monetary policy committee voted to cut interest rates by a further 25 basis points, from the 5% to 4.75% range to the 4.75% to 4.5% floating range. Once again, in theory a reduction in a nations interest rate should benefit the long-run performance of equity products. Equity markets continued higher for a second session, the S&P 500 ($SPX) broke new records, rising a further 44.06 points (0.74%) to 5,973.10, while the Nasdaq 100 ($NDX) rose 320.23 points (1.54%) to 21,101.57, also breaking new record highs at its intraday peak. Despite a particularly strong performance yesterday, the Dow ($INDU) experienced a marginal pull back as prices fell 0.59 points (0.0013%) to 43,729.34, though this is unlikely to signal any change to wider momentum into Friday.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice