Stock Indices
|
Name of the index |
Friday’s close |
Net Change |
Net Change (%) |
|
Dow Jones Industrial (US 30) |
35,601.98 | -485.47 | -1.35% |
|
S&P 500 (U.S. 500) |
4,697.96 | +15.16 | +0.32% |
|
Nasdaq (US Tech 100) |
16,573.34 |
+384.22 | +2.37% |
Source: Bloomberg
On Friday, 19 Nov 2021, stocks ended the week mixed as COVID-19 cases surged across Europe, and investors weighed its impact on the global economy. During the week, the S&P posted a gain of 0.32%, while the Dow took a dive, translating to a 1.35% drop. Meanwhile, the tech-heavy Nasdaq posted some impressive gains, rising 2.37% for the week — a historic close for the Index. Nasdaq-100 surged higher as tech stocks appeared to be the popular choice amongst investors. Strong earning results from Nasdaq-listed Nvidia, the world’s largest producer of computer chips, enticed investors to purchase other chipmakers.
Additional tech moves saw Apple rise 7.51% on the week after reporting that it would refocus its electric vehicle efforts towards self-driving capabilities. Lower bond yields also contributed to the rise in stocks. The 10-year Treasury fell to 1.545% on Friday, 19 Nov 2021, down from 1.586% on Thursday. This caused stocks to become more attractive to investors because bond prices move inversely with bond yields. Corporate earnings continued to surpass Wall Street’s expectations despite inflationary pressures and ongoing supply-chain disruptions.
Companies like Nvidia (NVDA) and The Home Depot, Inc. (HD) had the largest gains in corporate earnings for the week, adding 7.91% and 9.16%, respectively. However, not all corporate postings translated into green readings across the board. Cisco Systems Inc (CSCO) closed the week in the red after reporting disappointing revenue, along with forecasts that missed investors’ estimates. Following a similar suit, Visa (V), a major Dow Jones component, fell by nearly 5% after Amazon said it would stop accepting payments made with Visa credit cards in the UK.
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Forex
 |
 |
Source: Bloomberg
EUR/USD has been trading at low levels for the past 2 weeks due to comments made by the ECB President, stressing that rate hikes are unlikely in the near term. At the same time, U.S. Retail Sales increased by 1.7% (forecast at 1.0%). Moreover, concerns regarding COVID-19 have also led to nationwide lockdowns, further hindering the Euro. In a downtrend, EUR/USD is currently just below the 38.2% retracement level at $1.127, followed by the 23.6% retracement level at $1.10. GBP/USD gained a bit of momentum this week as CPI (YoY) data came in at 4.2% vs 3.9% expected.
Retail Sales for the month were up 0.8% vs 0.5% forecast, whereas, for the US dollar, Retail Sales were up 1.7% vs 1.0% forecast. The GBP/USD pair ended the week near $1.34, and its next support level is the 61.8% retracement level near $1.31, followed by a 50% retracement level near $1.28. Resistance is seen at 78.6% retracement levels near $1.37.
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Commodities
Source: Bloomberg
At the start of the week, gold struggled to maintain its momentum against the dollar due to an increase in Treasury Yields. Retail sales were higher than predicted, fueling strong inflation. However, gold managed to go up briefly on Wednesday, 17 Nov 2021, by 0.86% amidst a 4 basis point drop in the 10-year US Treasury Yield. Gold then slipped due to the market rallying on Thursday, 18 Nov 2021, with Large Cap Tech outperforming. XAU/USD finished the week near $1,845.00, and its next support level is the 38.2% retracement level near $1,830.00, followed by a 23.6% retracement level near $1,770.00. On the upside, resistance for XAU/USD is near $1,875.00 at 50% retracement levels, followed by $1,920.00 at 61.8% retracement levels. On Friday, 19 Nov 2021, gold against euro closed at €1,634.91, maintaining its upward trend from the previous 4 weeks.
This movement was primarily due to the ECB keeping interest rates below zero and pushing back the possibility of a rate hike in the near term. If the ECU decides to hike rates, the situation could potentially weaken gold’s value with inflationary pressures rising across Europe. The technical analysis indicates that XAU/EUR is facing resistance near the 78.6% retracement level of around €1,670.00. On the downside, the pair faces resistance at its 61.8% retracement level around €1,605.00, and €1,560.00 at its 50% retracement level. Oil ended at $76.10 and has been declining for the past 4 weeks.
This decline can mainly be attributed to the increasing Covid-19 cases in the Eurozone and the possibility of the US and China releasing crude oil reserves to lower the price. As per the chart, it is currently above the 78.6% retracement level, near $66.00. On the upside, if things change, at the 127.2% retracement level, it may climb up to $105.00.
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Cryptocurrency
Source: Bloomberg
China’s renewed pressure on crypto, the new U.S. tax-reporting provisions, and India’s idea of possibly allowing trading only on pre-approved virtual currencies contributed to Bitcoin falling below the $56,000 mark on Friday, 19 Nov 2021. However, since then, the global cryptocurrency capitalization surged marginally by 0.55% to $2.63 trillion. Bitcoin and Ethereum showed small signs of green, while Solana, Polkadot and Dogecoin fell slightly.
As per market reports, Bitcoin lost almost 20% in less than 15 days. On 21 Nov 2021, President Nayib Bukele of El Salvador announced plans of issuing a $1 billion U.S. “bitcoin bond,” a tokenized financial instrument developed by Blockstream, on the Liquid Network. El Salvador intends to issue the world’s first sovereign Bitcoin bonds and build Bitcoin City, which will supposedly be free of income, property and capital gains taxes.
Ethereum’s network continues to suffer from congestion despite a drop in Ethereum transaction fees. MATIC Network is addressing congestion by offering its new scaling solution, Miden. Following the activity on the Polygon network, it has hit a high. In the past week, it generated $6,10,000 in revenue, with transactions on MATIC exceeding those on ETH by over four times. As per the charts, BTC/USD is currently near the $58,000 mark. The next support level is at 61.2% retracement, near $53,500, followed by 50% retracement at $49,000. On the upside, BTC/USD resistance is near $60,000 at 78.6% retracement levels.
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