• Bryony Ockwell

New year new markets?

As we have rung in the new year, let's take a look at the current market climate for early 2022.

How is the market in the U.S?

Generally speaking, the January 5th was a weak day for the North American market. In early trading, Dow Jones Industrial Average was up 0.5%, but it slid later on and couldn't recover all of its losses. At the end of the trading period, S&P 500 index Russel 2000 both dropped 3.3%, S&P 500 dropped 1.9% and Dow Jones dropped 1.1%. It is suspected that the drop is caused by balance sheet runoff.

Along with the weak day for market, growth stock suffered decent intraday loss, on average fallen 3%. On the other hand, value stock was relatively resilient to downward pressure.

In other news, US Federal government is now very likely to let the interest rate to hike, which is expected by many economists.

This expectation is further firmed up by the release of December ADP, which showed 807,000 jobs was added to private sector payrolls in December, 2021.

On the other hand, many economists are worried about shrinkage rate in the latest release of US GDP, which showed 0.1%, lower than expected.

How is the Asian market looking?

China Huarong asset management (2799 SEHK) resumed trading after a long time thanks to the $6.6 Billion state bail-out. However, the stock price dropped sharply 40% immediately after the opening, and continue to drop until settled on a total 57% drop. It was put on “Close-only” condition in fear of de-listing.

Also from China, China’s announcement regarding tightening regulation on their tech companies continue to cascade. And Tencent Holdings sold a $3 Billion stake piled on to the tumbling. This caused the Hang Seng Teck Index to fall 4.6%, and major players in the sector suck as Kuaishou Technology and Meituan Food Delivery felled 7.5% and 11% respectively.

The only thing to rise in Asia was Bank of Korea, which raised its policy rate by 25 basis points due to increase inflationary pressures, and the Nikkei 225 which rose 0.2% despite weakness in Europe.

What about Europe?

European market showed some strong sigh initially, however, at the end of the trading period, CAC40 index felled by1.23%, it dipped by 50 points in the last 1 hour. It is suspected that the drop was caused by the weakening of German factory orders.

Finally, despite US Crude oil price close on 77.17, which is the exact same price on opening, the crude oil market is likely to remains bullish in the near future.

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