Global Market Trends (19th Oct., 2021)

Analyst View

The U.S. stock indexes were mixed Monday responding to oil prices that hinged up to seven-year highs while industrial production slowed. The Dow Jones Industrial Average fell 36 points, or 0.1%, while the S&P 500 index and the Nasdaq Composite index advanced 0.34% and 0.84%, respectively. Industrial production fell 1.3% in September, missing the 0.2% gain that was expected. The yield on the 10-year Treasury note rose 1 basis point to 1.58%, holding near a four-month high, given more excitement to fixed income investors.

The European indexes declined across the board with Britain’s FTSE 100 sliding 0.42%, Germany’s DAX 30 declining 0.72%, and France’s CAC 40 falling 0.81%. 

In Asia, China’s Shanghai Composite index and Japan’s Nikkei 225 lost 0.12% and 0.15%, respectively, while Hong Kong’s Hang Seng index edged up 0.31%. Meanwhile Chinese economy grew at a 4.9% pace in July through September from a year earlier, down from 7.9% in the previous quarter, as ongoing supply bottlenecks and the Evergrande debt crisis weighed on the confidence of market players. 

Commodities market -When oil prices go up it is always a good sign for the economy particularly oil-exporting countries and it is a sign of global economic growth. However, with oil crossing the $83-per-barrel level Monday, the winds have shifted to inflation woes and supply chain disruptions. In stocks, oil companies, including Chevron Corp. and Diamondback Energy Inc., were in focus as West Texas Intermediate crude oil touched a seven-year high of $83.87 before paring its gains and finishing up 16 cents at $82.44 a barrel.