Signs of interest rate hikes soon  and Asian indices are in the green zone except for the Nikkei

Asian indices Nikkei US indices

Signs of interest rate hikes soon  and Asian indices are in the green zone except for the Nikkei

Signs of interest rate hikes soon  and Asian indices are in the green zone except for the Nikkei: The last week of October is full of several surprises ahead,
as major US tech companies will announce this week their profits and financial results, prompting global markets to be in a holding pattern. 

Evest follows market developments in the following report.


variation in US indices last Friday

The Federal Reserve is starting to consider a quick rate hike

The Nikkei is the only index to fall in Asia

Oil prices approached multi-year highs

Gold approaches $1,800

The Week’s Agenda

variation in US indices last Friday

Stock indices in the United States changed on Friday by 0.1-0.8%: The Dow Jones + 0.2% index renewed its cap;
Standard & Poor’s fell by -0.1% and Nasdaq (-0.8%) due to the decline in tech companies’ stock prices against the backdrop of quarterly reports by Intel & Snap that did not meet expectations.

In the meantime, 84٪ of the companies that reported the third quarter said the stock’s profitability was better than expected.

The Federal Reserve is starting to consider a quick rate hike

The market was also constrained by U.S. Federal Reserve Chairman Jerome Powell’s announcement that the U.S. labor market could reach maximum jobs next year.

That’s one of the main factors that led the Fed to start raising interest rates.

The Chairman of the Central Bank said the Fed would raise interest rates if it sees serious risks from rising inflationary expectations.

According to him, the rate of consumer price increases is likely to continue next year. Supply problems drive up prices, making it difficult to predict when this situation will return to normal.

The Nikkei is the only index to fall in Asia

Index growth prevailed in Asia on Monday, with the exception of Japan, where Japan’s Nikkei index declined by 0.7%,
China’s Shanghai Composite Index rose by 0.8%, and Hong Kong’s Hang Seng Index grew by 0.1%.

In Japan, stocks of tech companies declined after similar dynamics in traded stocks of US tech companies on Friday.

The main index of the Tokyo Stock Exchange, Nikkei, closed on Monday,
down 0.71% due to the defeat of the ruling party on a regional election date one week before the general election.

The Nikkei index, with 225 representative market titles, fell by 204.44 points, to 28600.41.

The Topix index, which includes companies with the highest capitalization of the first division,
fell by 0.34%, or 6.81 points, to 1,995.42 points.

The Tokyo market opened low on the day, with local investors expressing concern about the electoral defeat suffered by the Liberal Democratic Party (PLD) ,
in a regional election appointment just one week before the general election.

The ruling party lost a seat in the Japanese Parliament Senate in the middle of the election campaign,

which would have upset investors before next Sunday’s elections, according to local analysts.

The information and communications, rubber and air transport sector recorded the greatest losses.

On the other hand, the Chinese Government has tightened the restrictions imposed by the COVID- 19 epidemic in some areas in response to new infections.

Tourist attractions in northern Gansu province were completely closed on Monday. 

Oil prices approached multi-year highs

Oil prices continued to rise on Monday morning and were near their multi-year highs because of continued strong demand and limited supplies of raw materials. 

Brent crude futures’ cost for December was $86.05 per barrel (+ 0.6٪ and + 1.1٪on Friday),

and West Texas Intermediate crude for December was $84.31 per barrel  (+ 0.7٪ and + 1.5٪ on Friday).

The weak recovery in US oil production and the easing of travel restrictions also supported US oil, according to MarketWatch.

The Brent mix rose 0.9 percent last week.

West Texas Intermediate closed with gains for the ninth straight week, adding 2.6%.

Oil inventories at Cushing Terminal, as NYMEX-traded oil is stored, are fast approaching very low levels and analysts expect that decline to accelerate.

Oil prices were last above $100, according to the Wall Street Journal.

Infrastructure Capital Advisors’ experts expect next year’s oil prices to reach $80-100 per barrel amid renewed demand for international travel.

They said in a note: “Oil continues to gain over the course of three months,
during which time it gained approximately 30% as the number of vaccinations against Covid-19 rose,

and the United States allows travel for vaccinated passengers.”


 Gold approaches $1,800

Gold prices approached the key $1,800 level on Monday, backed by a weak dollar as investors assessed the Fed’s potential response to inflationary pressure,

after its chairman said inflation could last longer than expected.

The price of spot gold rose 0.3 percent to $1797.81 per ounce as of 0712 GMT. US gold futures rose by 0.1 percent to $1797.20.

On Friday, metal rose to its highest level since early September before the gains were reduced after Fed Chairman Jerome Powell,
said the US central bank should start cutting its purchases of assets.

The Week’s Agenda

The financial results of the largest US companies are expected to be published this week, which could increase tension among market participants. 

Facebook will report Monday, Microsoft and Fabbit on Tuesday, Apple and Amazon on Wednesday. 

Significant macroeconomic statistics are also expected to be published, including demand for durable goods in the United States for September (Wednesday),
and the first estimate of US GDP for the third quarter (Thursday), as well as data on US spending and consumer income.