Weekly Global Markets Digest #12 Oct 12 — Oct 18, 2020
- Economic indicators in the US and Europe continue to deteriorate, putting pressure on major indexes.
- Apple has announced the release of a new line of iPhone 12.
- The EU has extended the deadline for Brexit negotiations.
- The Chinese EV market has seen a phenomenal surge in buyers.
How did the quotes of financial instruments change and what important things happened on the market from October 12 to October 18? You will find out in today’s weekly financial digest.
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Shares of major companies closed the week on a positive note
Technology companies were interesting to investors last week. Many stocks closed higher despite correcting on Thursday amid concerns about the lack of a deal to boost the US economy. Shares of the four largest companies rose almost equally: Apple (AAPL) gained 4.99% to $120.71, Amazon (AMZN) gained 4.64% to $3,338.65, Google (GOOGL) gained 4.86% to $1,555.47, and Microsoft (MSFT) — 4.31% to $219.66. The outsider was Facebook (FB), whose shares gained only 1.12% to $266.72.
Apple has introduced the new flagship — iPhone 12 — to the market. According to preliminary estimates in the US, new models in stores will cost from $943 to $1,071. It also became known that Apple will stop production of smartphones iPhone 11 and 11 Pro — a year after the release. At the same time, the price of them decreased.
Tesla (TSLA) shares gained 3.43% to $448.88 over the week. Surprisingly, Tesla lost the lead to Amazon among the most actively traded stocks. Such high interest in AMZN shares is caused by Prime Day, which the company held last week. CNBC reports that Amazon managed to earn more than $3.5 billion that day.
Among the most active stocks were Nio Inc Class A ADR (NIO), which gained 30.74% to $28.07. This is happening because there is a phenomenal demand for electric cars in the Chinese market. Analysts suggest that Nio will take the lead in the EV market in China.
USA
Major US indexes show a mixed picture. The advantage was again on the side of technology stocks, while the last week was not the best for the manufacturing sector. Indexes fell sharply on Thursday as investors’ hopes for an economic recovery before the presidential election faded. The situation is made worse by the fact that the number of unemployment benefits issued has increased, and the rate of inflation has been in line with expectations.
Last week, companies started reporting for the 3rd quarter. Analysts predict that the fintech sector will show a positive trend in revenue for this quarter.
S&P500 (SPX): +0.18% to 3,483.34
NASDAQ (IXIC): +1.16% to 11,713.87
DOW JONES (DJI): -0.32% to 28,494.20
Xilinx (XLNX) shares were on the list of gainers for the second week in a row and gained 11.55%. Recall that the reason for the growth was the information that AMD plans to buy the company for $50 billion.
This is followed by shares of Invesco (IVZ), which rose by 10.04%. on October 13, it became known that Invesco will launch an innovative QQQ package together with Nasdaq.
Vertex Pharmaceuticals Incorporated (VRTX) shares are down 19.83%. On Thursday, shares plunged 20% after the company announced that it had halted development of the VX-814 drug.
Vontier Corp. (VNT) is down 17.16% and 23.54% for the year after news that the company split from Fortive a week earlier.
Asia
The head of the People’s Bank of China said that he plans to take additional measures to stimulate the market and weaken the yuan. As in the US, the growth of Chinese indices was supported by the technology sector. XI Jinping is going to support the IT sector of the economy.
The correction in the US stock market in the second half of last week also affected the Asian market, as a result of which the main indices fell in price. The negative side was strengthened by accelerating inflation and lower prices of Chinese manufacturers.
Meanwhile, there is a negative trend in consumer sentiment in Australia. However, the S&P/ASX 200 index managed to close higher as the unemployment rate was lower than analysts’ forecasts.
Nikkei 225: -0.89% to 23,410.63
S&P/ASX 200: +1.22% to 6,176.80
Shanghai Composite: +1.96% to 3,336.36
KOSPI: -2.11% to 2,341.53
Shares of the Chinese company Kaixin Auto Holdings (KXIN) show an extraordinary growth of 150.94%. This rapid growth is caused by an explosion of interest from investors in the Chinese car market.
Dragon Victory International Limited (LYL) shares are up 77.06% after the company reported profit and showed positive results. Shares of Dunxin Financial Holdings Limited (DXF) gained 53.69%.
Shares of Q&K International Group Limited (QK) fell 25.62% to hit a 52-week low after markets collapsed on Thursday. Vedanta Limited (VEDL) lost 20.90% after a failed delisting attempt from the Indian stock exchange. The company must return the shares put up for auction to investors.
Eurozone
In Europe, the incidence of coronavirus continues to gain momentum, which caused investors to worry about economic stability and led to a drop in major indices. Due to the increase in infection, EU countries have increased restrictive measures to counter the spread of COVID-19.
Last week was supposed to be the last for negotiations on the Brexit deal, which was in the focus of investors’ attention. This news, as well as news about the rising unemployment rate in the UK, was the main reason for the fall of the FTSE 100 index. However, the final decision was made by the EU summit, which extended the terms of negotiations.
CAC 40: -0.68% to 4,909.45
FTSE 100: -1.71% to 5,911.75
DAX: -1.70% to 12,820.25
Natuzzi S. P. A. (NTZ) shares are up 28.88%, updating their annual high last week after publishing a positive third-quarter financial report, while Jumia Technologies AG (JMIA) is up 22.72%.
Biotechnology companies are going through hard times in the coronavirus market. Shares of ADC Therapeutics SA (ADCT) from Switzerland fell by 23.51% due to the lack of new developments.
Shares in the Irish company Mallinckrodt (MNK) lost 23.26% for the second week in a row. Last week, the company declared bankruptcy.
Oil continues to grow on news of a reduction in its production
The amount of oil production decreased more than analysts expected, which led to a short-term positive price dynamics. However, this did not save oil prices from a weekly drop: WTI fell 0.37% to $40.45, and Brent — 0.65% to $42.55. The US reports that crude oil inventories are falling by 3.8 million barrels in one week.
Gold is consolidating near $1,900 for the third week in a row. Over the week, the price of gold fell just 0.81% to $1,911.75. Silver fell slightly more — by 2.43% to $24.56 an ounce.
The most positive previous week was for wheat and corn in the United States, prices for which increased by 6.01% and 3.42%, respectively. The increase in cost is due to a decrease in grain stocks in the US agricultural sector.
USD/RUB: +1.81% to 78.1378
USD/JPY: -0.25% to 105.32
EUR/USD: -0.78% to 1.1729
GBP/USD: -1.04% to 1.2902
AUD/USD: -2.24% to 0.7077
In the light of recent events on the European market, the EUR/USD rate is again falling below 1.1800, and the GBP/USD rate is below 1.3000. The head of the ECB, Christine Lagarde, in his speech touched upon the issues of monetary policy. The increase in the incidence of COVID-19 leads to a weakening of exchange rates in Europe.
Against this background, the US dollar is strengthening, which was helped by a $1.8 trillion aid package. The most negative dynamics against the dollar can be traced in the Australian dollar and the Russian ruble.
The Australian dollar is falling the most. The RBA believes that the unemployment rate will remain at a high level, which puts strong pressure on the AUD. Adding to this are risks surrounding the upcoming speech by RBA Governor Lowe, as investors are not confident that new stimulus for the Australian economy will be launched.
See you again in a week.
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If you missed our Weekly Crypto Markets Digest #12:
https://medium.com/@excelsior_one/weekly-crypto-markets-digest-12-oct-12-oct-18-2020-4a81782371eb
