Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Global Market Report - 17 November

Lewis Jackson  |  17 Nov 2021Text size  Decrease  Increase  |  
Email to Friend


The ASX is set to follow Wall Street higher as RBA Governor Lowe holds dovish line.

The Australian SPI 200 futures contract was up 28 points or 0.37% at 7,437 near 8.00 am AEST on Wednesday, suggesting a positive start to trading.

US stocks rose Tuesday after a consumer-spending report raised hopes for the holiday-sales season.

The S&P 500 rose 0.4%, reversing Monday's declines and leaving it just short of last week's closing high. The Dow Jones Industrial Average, which fell three of five days last week, added 0.2%. The technology-focused Nasdaq Composite Index climbed 0.8%.

The Australian dollar was buying 72.98 US cents near 8.00am AEST, down from the previous close of 73.45. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, rose to 89.70.

Locally, the S&P/ASX 200 closed 0.7% lower at 7420.4 after the central bank governor said he expected inflationary pressures to ease and interest rates to remain low for some time. The benchmark erased its week-opening gains a few minutes after the opening bell and continued to drift lower through the session.

The materials sector was the biggest loser amid weakness in metals prices. Miners Rio Tinto and BHP dropped 2.2% and 2.6%, respectively, while steelmaker BlueScope gave up 1.8%.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

Shares in energy companies also fell, with Woodside, Santos and Oil Search losing between 0.8% and 1.2%.

Tech was the only sector not to fall, gaining 0.2%.

Reserve Bank Governor Philip Lowe said on Tuesday he expects the current perfect storm of inflationary forces to moderate over the next 18 months, and that the central bank will only raise interest rates when it is confident that inflation won't slip again.

Gold futures fell 0.8% to $US1851.90 an ounce; Brent crude rose 0.55% to $US82.50 a barrel; Iron ore was up 1.1% US$90.04.

The yield on the Australian 10-year bond rose to 1.82%; The US 10-year Treasury yield rose to 1.64%.


Chinese stocks ended the session lower on Tuesday, extending Monday's downturn. The drop came despite a virtual meeting earlier today between US President Biden and Chinese President Xi Jinping, who sought to cool tensions between the two powers. The benchmark Shanghai Composite Index fell 0.3%. Commodities sectors, including steel makers, metal producers and coal miners, led the losers as commodity prices have been under pressure in recent weeks.

Hong Kong's Hang Seng Index rose 1.3%, closing higher for a sixth straight session after a virtual meeting between US and Chinese leaders seemed to cool tensions. The summit could pave the way for subsequent trade negotiations and possibly a softening of US trade measures against China, ANZ says. The tech sector strengthened, with Tencent Holdings, Alibaba Group and Meituan up between 2.2%-2.7%, contributing to the Hang Seng TECH Index's 1.7% rise.

Japanese stocks edged higher as traders continued to watch for developments over the country’s fiscal stimulus plans. The Nikkei Stock Average added 0.1%. Trade relations will be in focus after the US and Japan agreed to start tariff talks.


European stocks trade mostly higher in closing trade, lifted by well-received corporate earnings and strength among telecoms and auto stocks. The pan-European STOXX 600 index, which tracks the performance of companies across 17 European companies rose 0.17%.

In London, The FTSE 100 index slipped 0.34%.

North America

US stocks rose Tuesday after a consumer-spending report raised hopes for the holiday-sales season.

The S&P 500 rose 0.4%, reversing Monday's declines and leaving it just short of last week's closing high. The Dow Jones Industrial Average, which fell three of five days last week, added 0.2%. The technology-focused Nasdaq Composite Index climbed 0.8%.

US equities have wavered over the past week after a strong run this year. The Dow has jumped 18% this year, the S&P 500 is up 25% and the Nasdaq has risen 23%. Stocks have been boosted by aggressive central-bank support, though many central banks are starting to pare back their stimulus programs. The Federal Reserve has started to "taper" its bond-buying program and the Bank of England could raise interest rates as soon as next month.

Worries about inflation also have sapped markets of the momentum that propelled stocks to records earlier in the fall. Higher rates could knock stocks and other riskier assets that have benefited from 18 months of monetary stimulus.

"We're moving toward a period now of maybe a bit more volatility," said Frank Øland Winther, global chief strategist at Danske Bank, pointing to Covid-19 cases in Europe, trouble in China's property sector and inflation in the US as potential challenges for the market. "The returns we have seen this year so far just cannot continue."

Retail sales rose 1.7% in October, the Commerce Department said, suggesting consumers weren't put off buying by rising inflation. Walmart and Home Depot reported higher sales.

Home Depot shares rose 5.8% after the retailer reported that same-store sales increased 6.1% in August through October, building on strong growth earlier this year. Walmart shares fell 2.5% even though the retailer also reported another quarter of higher sales.

But the retail numbers don't paint the full picture, said Peter Boockvar, the chief investment officer at Bleakley Advisory Group. Since March, inflation has been increasing at a faster clip than retail sales and wages. That means that in real terms, both have been falling. "It's hard to sustain retail sales on a volume basis when real wages are down," he said.

Government bond yields rose, extending a recent advance. Yields on benchmark 10-year Treasury notes rose to 1.632% Tuesday from 1.621% Monday. Yields move in the opposite direction of prices.

Cryptocurrencies retreated, a sign that riskier assets could be losing momentum. Bitcoin briefly fell below $59,000, its lowest price in November.

The decline hit crypto-related stocks. Software company MicroStrategy fell 5.4% and mining company Riot Blockchain fell 12%. Bitcoin wallet provider Coinbase Global was down 0.9%.

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

AAP logo

© 2022 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend