Summary:
Wall Street rallied despite Powell's inflationary remarks; European shares fell from three-week highs on a luxury stock decline.
Wall Street rallied on Friday despite Powell’s remark that higher interest rates might be need to tame inflation. But European shares eased from three-week highs as luxury stocks tumbled again.
The FTSE 100 led the loss after data showed that the UK GDP failed to grow in the third quarter. It has performed the worst among European major stock indexes year-to-end which is still in negative territory.
Moody's on Friday lowered the outlook on the US's credit ratings to "negative" from "stable". The rating agency cited weakening debt affordability as fiscal deficits are expected to remain very large.
Global equity funds drew massive inflow in the week through 8 Nov as investor sentiment improved following the Fed’s decision to keep policy rates unchanged.
Meanwhile, bond funds broke a three-week streak of outflows, registering $6.73 billion in net purchases. High yield bond funds saw substantial inflows of around $6.43 billion, the biggest weekly gain since mid-June 2020.
Precious metal funds garnered $73 million in net purchases for a second consecutive week and energy funds recorded $54 million in inflows, marking three weeks of consecutive gains.
The FTSE 100 has been pressed negatively by the 50 MA. It seems hard to regain appeal in the short term given cooling oil markets. Any rally towards the resistance could be subject to renewed selling.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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