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Morning Markets Report – Tuesday 16th November 2021

Major UK stocks were also hampered by weakness in the mining sector

There were no major data releases on Monday, but with a strong New York business survey. US bond yields edged higher on the day with inflation developments remaining crucial.

Wall Street equities were little changed with reservations over underlying valuations. Asian equities were again mixed despite relatively positive US-China political talks.

The dollar posted strong net gains, primarily against low-yield currencies with the trade-weighted index at fresh 15-month highs.

EUR/USD dipped to fresh 15-month lows near 1.1350 as ECB rhetoric remained dovish with coronavirus concerns also a factor. Sterling was underpinned by slightly hawkish Bank of England rhetoric with further gains after solid labour-market data with EUR/GBP at 10-day lows.

Commodity currencies were resilient in the face of a firm US dollar with the Canadian dollar out-performing. Oil prices were hampered by demand reservations and US dollar gains, but rebounded strongly from lows. Precious metals were resilient in the face of dollar strength amid long-term inflation concerns.

Cryptocurrencies declined sharply with bitcoin sliding towards $60,000 on regulatory unease.

Euro-zone equities were hampered by losses in the mining sector, but overall sentiment held firm, especially with expectations that the ECB would maintain a very accommodative policy stance and bourses overall posted a fresh record high.

Major UK stocks were also hampered by weakness in the mining sector while Bank of England inflation warnings also kept overall confidence at bay. The FTSE 100 index was in negative territory for most of the day before a marginal gain at the close.

Wall Street stocks were held in tight ranges on Monday with uncertainty over underlying inflation trends offset by near-term optimism over earnings trends and the S&P 500 index closed unchanged.

US futures were little changed on Tuesday with Asian markets again mixed.

Japans Nikkei 225 index gained 0.1% as the dollar posted net gains while the Australian ASX index declined 0.65% amid a retreat in commodities.

China’s Shanghai index declined 0.3%, but Hong Kong’s Hang Seng index posted a 1.0% advance in late trading.

 

Stock to watch today

London Stock Exchange shares have been trading in a well-defined range for a number of months. The shares are trading towards the lower end of the range and volume has started to build in recent sessions. A bullish engulfing candle was posted in yesterday’s session, which indicates the buys are stepping in and taking advantage of the value on offer. We believe a move to the upper end of the range is possible from here.

 

CCM Opinion: BUY

Buy between 7065 – 7240p

Stop: 6790p

Target: 8230p

 

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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