1st December 2021 Morning Report

Wednesday 1st December 2021

The Dow Jones Industrial average declined over 500 points or 1.69%%, while S&P 500 and Nasdaq Composite each dropped 1.66% and 1.57% respectively, after the Federal Chairman admitted the Fed had got its view of inflation as "transitory" wrong. He said policymakers may need to speed up the pace of previously outlined tapering plans, because of the omicron Covid -19 variant. He said removing the word "transitory", from Fed comments now makes sense and that the Fed will use their tools to ensure inflation does not become entrenched.

S&P CoreLogic Case-Shiller report showed the 20-city index jumped 1.0% in September, lagging August’s 1.2% increase. Year-over-year gains remained strong rising 19.1%, the fourth largest jump on record. Also, the Institute for Supply Management's Chicago Purchasing Managers’ index for November, declined to 61.8, far below the 68.4 in October, as supply shortages continued to hinder growth. The Conference Board also reported a dip in its reading to 109.5, as omicron concerns hit sentiment. The US 10 – year note yield dropped to 1.44% while the US 2 – year treasury bill fell to 1.142%. Oil declined sharply, with WTI at US$65.2 per barrel a decline of 6.76%.

Other key markets were mostly down. Singapore led Asia's declines, tumbling 2.5%, while South Korea’s Kospi declined 2.4%. Nikkei 225 and the Hang Seng closed 1.63% and 1.58% lower respectively. The Shanghai Composite ended up 0.03%, virtually unchanged, as pessimism over the omicron variant set in. The leading European markets were all down with the FTSE100 falling 0.71%, the DAX 30 down 1.18% and both the CAC 40 and STOXX600 falling 0.81% and 0.92% respectively.

Morning Report 01 December 2021

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