Weekly Market Update
A False Alarm...
It was like unwelcome rain on a desert safari on Monday last week when the markets were down...
Weekly Market Update
As expected, the bears came out of a six-month-long hibernation in September, bringing the S&P 500 down by 4.89%. A typical correction during a bull market, blown out of proportion by the media.
Despite the pullback, the S&P 500 is still up by 16% YTD; the Dow and Nasdaq are up by 12.2% and 13.00%, respectively.
A slew of positive economic data and a potential oral treatment of Covid-19 announced by Merck boosted investor sentiment on Friday.
While the Democrats and the Republicans are still split on raising the debt ceiling, an interim spending bill was passed, to fund the government until early December.
The debt ceiling is very likely to be raised just before the deadline, but not without political drama, with each side trying to make the best of this stalemate.
Volatility is likely to continue in October a supply chain bottlenecks, inflation and tapering fears persist.
Europe
Driven by concerns about growth and inflation, European equities declined sharply last week.
- The Euro Stoxx index was down by 2.24%
- Germany’s Xetra DAX Index lost 2.42%
- France’s CAC 40 Index declined by 1.82%
- Italy’s FTSE MIB Index slid 1.36%
- UK’s FTSE 100 Index was down by 1.36%.
Japan
Shares in Japan also declined sharply as the Nikkei index was down by 4.89% last week. Former foreign minister Fumio Kishida won the Liberal Democratic Party’s (LDP) presidential election by beating Taro Kono. He is very likely to succeed Yoshihide Suga as Japan’s prime minister.
China
Chinese equities were flat, with the CSI 300 Index of large-cap stocks was up, and the Shanghai Composite Index was down from the previous week.
India
Indian equities were down on global cues and profit booking, breaking a five-week winning streak. Sensex was down by 2.10% to close at 58,765.58 points, and the Nifty was fell by 1.7% to settle at 17,532.05 points.
UAE
In the UAE, the EXPO 2020 commenced on Thursday with a grand opening ceremony.
With 191 countries participating in the six-month-long event, the EXPO 2020 aims to inspire collective and meaningful action to address the world’s most critical challenges and opportunities.
Outlook
Despite the sharp correction last month, investor confidence is still strong, and “Buy the Dips” seems to be the mantra for now. If you are uncomfortable with the recent correction; likely your portfolio is not aligned with your risk appetite. Speak to your financial advisor to review and realign your portfolio to your investment goals and risk appetite.
