US Session (11/18/2021)
In a turbulent session ahead of Friday's options expiry, technology stocks powered the equity market to a record.
The S&P 500 reached its 66th all-time high, putting the benchmark index on track to set the second-highest number of annual records in history, trailing only 1995. The tech-heavy NASDAQ 100 outperformed after global chipmaker Nvidia raised its outlook, while Apple surged after it was reported the corporation is accelerating the development of its electric automobile. Macy's Inc. and Kohl's Corp. led retail advances after indicating that consumer demand remains strong.
According to Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, the S&P 500 might reach 5,200 in the next six months in an environment of less monetary stimulus and outperformance by cyclical companies. That would imply an 11% gain from Wednesday's close.
Bitcoin fell for the fifth straight day on Thursday, retreating from record highs. Since the five days that concluded on May 16th, the world's largest cryptocurrency hasn't dropped that far. Crypto assets, unlike regular assets, trade on the weekend, therefore the streak encompasses Saturday and Sunday.
JPMorgan Chase & Co. economists said they now expect the Federal Reserve to raise interest rates in September, becoming the latest on Wall Street to abandon a forecast for the Fed to remain on hold until 2022. Analysts at Goldman Sachs Group Inc. predicted a Fed rate hike in July last month. Morgan Stanley analysts believe officials will continue to hold steady on interest rates for the rest of the year.
Asia Session (11/18/2021)
Asian markets were mixed, with Chinese technology sectors falling, but treasuries and the dollar remained firm as traders assessed the potential of faster monetary tightening to combat high inflation.
China's tech woes contrast with an overnight surge in a slew of mega-cap US tech giants. This helped the Nasdaq 100 and S&P 500 reach new highs in a turbulent session ahead of Friday's options expiration. Futures in the US edged higher.
Equities in Japan and China varied but retreated in Hong Kong, where Alibaba Group led to a drop in a major tech measure. Alibaba reduced its revenue forecast for fiscal 2022 due to increased competition, declining consumer spending, and Beijing's regulatory restrictions.
Treasuries were little changed, while the dollar index was on track for a fourth weekly gain. The last treasury bill auctions indicate that investors are beginning to demand higher yields to retain the shortest-maturity debt as the drama over raising or suspending the US debt ceiling resumes.
Europe Session (11/18/2021)
As traders adopted a more optimistic assessment of pricing pressures, u.s. equity futures moved higher and European equities remained stable around a record.
The Nasdaq 100's tech-heavy contracts outpaced the S&P 500. In premarket trading, Nvidia soared 7% as the world's largest chipmaker issued a sales projection. On the Stoxx Europe 600, equities were flat, with travel and leisure firms leading advances.
Global equities have been gaining ground as a result of strong earnings and signs that central banks would be conservative with rate hikes even as inflation continues to rise.
Money markets are now indicating that the European Central Bank will not raise rates until 2023, rather than this year. In the meantime, Turkey's central bank lowered its benchmark interest rate for the third month in a row, pushing the lira down to new lows.
ECB's Panetta: A digital euro prototype will be developed in 2023.
Kremlin: Nord Stream 2 has met all bureaucratic conditions for a German license, and that the pipeline is technically ready to go.
The full size of the Japan stimulus is 78.9 trillion yen - document.
EU extends pandemic aid through to the end of June 2022.
Japan LDP's Tax Chief Miyazawa: I would like the tax system to incentivize wage increases.
Friday FX Options Expiries
EUR/USD: 1.1500 (EU1.56B), 1.1375 (EU780.7M), 1.1625 (EU645.2M)
USD/CAD: 1.2350 ($845M), 1.2475 ($603M), 1.2370 ($567M)
USD/JPY: 114.75 ($574M), 114.00 ($500M), 99.98 ($454M)
USD/BRL: 4.7500 ($904M), 4.5500 ($799M), 4.8500 ($510M)
AUD/USD: 0.7275 (AUD302.4M)
USD/CNY: 6.3700 ($1.07B), 6.3970 ($370M)
EUR/GBP: 0.8600 (EU936.1M), 0.8525 (EU427.3M), 0.8425 (EU300M)
USD/KRW: 1187.00 ($470M), 1206.10 ($325M)