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Morning Markets Report – Monday 8th November 2021

Major UK stocks were unable to gain further strong support on Friday with reservations over underlying fundamentals

The US employment report overall was stronger than expected with a payrolls increase of 531,000 and further decline in unemployment. The jobs data reinforced confidence in the US and global economy.

US bond yields, however, declined sharply following the US data as underlying market inflation fears continued to ease slightly.

The dollar was unable to hold a brief spike higher to 12-month highs with a limited retreat later in the session as yields declined. EUR/USD recovered from 15-month lows just above 1.1500 to trade just above 1.1550.

The yen recovered ground as US yields declined with the Swiss franc also holding firm.

Sterling recovered from intra-day lows after hawkish comments from BoE Chief Economist Pill kept December rate hike expectations on the table.

Commodity currencies recovered from intra-day lows on Friday as the dollar faded. Oil prices posted fresh gains on underlying supply concerns and optimism over global demand. Precious metals were boosted by lower US yields with gold trading above $1,800 per ounce. Cryptocurrencies posted strong net gains over the weekend with Ether at a record high.

Euro-zone equities were able to make limited headway on Friday with underlying support from gains in the travel sector as the new Pfizer pill boosted confidence. The US jobs data also provided underlying support for the market.

Major UK stocks were unable to gain further strong support on Friday with reservations over underlying fundamentals as the comments from BoE’s Pill revived expectations of a December rate hike. The FTSE 100 index still posted a 0.3% gain.

Wall Street indices overall posted net gains on Friday with a favourable reaction to the jobs data. The decline in bond yields was also a significant factor underpinning sentiment with a fresh record high for the S&P 500 index.

Asian markets overall were mixed on Monday with uncertainty over direction as US futures drifted lower while Chinese real-estate developments remained an important focus.

Japan’s Nikkei 225 index declined 0.35% while the Australian ASX index declined 0.05%.

China’s Shanghai index traded 0.2% higher in late trading with Hong Kong’s Hang Seng index 0.5% lower.

 

Stock to watch today

 

Babcock shares are trading in a bullish channel over the medium term term. The latest pullback towards support at 311p seems to have attracted fresh buying support. The shares have been consolidating in recent weeks and have formed a wedge pattern on the daily chart. The break out of the wedge pattern on Friday could lead to an uptick in bullish momentum over the short term. We expect to see new highs in the coming weeks.

 

CCM Opinion: BUY

Buy between 325 – 340p

Stop: 297p

Target: 407p

 

 

 

The value of shares can fall as well as rise; you may not get back the amount you invested. Past performance is no guarantee of future performance. Capital is invested at risk This document is published by Clear Capital Markets and does not constitute a solicitation or personal recommendation for the purchase or sale of investment. The investments referred to may not be suitable for all investors. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Clear Capital Markets Limited is authorised and regulated by the Financial Conduct Authority FRN 706689.

 

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