The last week in the equity markets was truly eventful, as news kept on coming from all parts of the world.
US stocks suspended their six-week upswing as investors’ expectations went up to 70 per cent that the Fed will go for an interest rate rise in December after a positive U.S jobs report. American equity market index, S&P 500, fell from 2,115 on Nov. 3 to 2,079 on Nov. 9 – a drop of 1.9 per cent. Moreover, revenues for the 3rd quarter for companies whose shares constitute the index fell 3.7. per cent year-on-year.
Although European equities also dropped, Daniel Waldman, strategist from UBS, suggests to go for European equities as there is expectation that GDP will go up throughout Eurozone, while possibility for the US recession “still remain”. In addition to this, the stronger U.S. dollar (and weaker Euro respectively) can probably move European equities up in the future.
The situation with China is slightly different. China’s Shanghai Composite Index rose 6 per cent during the past week as the government removed the ban on initial public offerings (IPO). Mainly, this is a strong signal that China’s government is confident in equity markets, which can embolden investors to buy Chinese stocks further. Nevertheless, the data on China’s exports and imports in October were not satisfactory (a fall by 6.9 per cent and 18.8 per cent respectively). Price data and information on industrial production and retail sales will be made available soon, and those are expected to be unconvincing, too. Thus, it is hard to predict in which direction Shanghai Composite Index will move in the coming several weeks, but it is clear that many investors are turning bullish on China again.
By Vjačeslavs Šuhtins
