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Monday, 21 December 2020

What the markets are doing on 21 December 2020

Predicting market movements in 2021 may prove to be as difficult as it was this year as the pandemic — and the fiscal and monetary responses — continue to distort markets, the Wall Street Journal says. The main takeaway here: Take each and every forecast with a handful of salt. Reading the fundamentals is no longer enough, and even if analysts correctly second-guess the policy responses to the pandemic, forecasts will likely be continuously revised through the year as markets continue to behave in unexpected ways.

When are we going to start calling this a bubble? Everything from stocks to bonds to bitcoin is surging despite renewed lockdowns, covid-19 spreading at its fastest pace, and an economic cycle “on life support,” says Bloomberg, which terms the financial goings-on as “a speculative frenzy” but stops short of using the B word. The rally has taken the value of global equities to USD 100 tn, new listings this year to a record USD 175 bn, and has led to negative yields on USD 3 tn-worth of bonds (or much higher bond prices). Underpinning this bull run: record easing from world central banks creating “the easiest financial conditions in history” and fear of missing out on the post-covid rally now that vaccines are rolling out.

Commodity-linked assets are set to see a second heyday as their cyclical price shifts make them likely to benefit from a global vaccine rollout, Bloomberg reports. While prices of copper, iron ore and soybeans were driven to their highest levels in six years by a Chinese buying spree, global investors are also now piling into commodities as a hedge against high inflation.

Up

EGX30

10,890

+0.4% (YTD: -22.0%)

Down

USD (CBE)

Buy 15.62

Sell 15.72

Down

USD at CIB

Buy 15.62

Sell 15.72

None

Interest rates CBE

8.25% deposit

9.25% lending

Down

Tadawul

8,687

-0.3% (YTD: +3.6%)

Down

ADX

5,114

-0.4% (YTD: +0.8%)

Up

DFM

2,559

+0.4% (YTD: -7.4%)

Down

S&P 500

3,709

-0.4% (YTD: +14.8%)

Down

FTSE 100

6,529

-0.3% (YTD: -13.4%)

Up

Brent crude

USD 52.26

+1.5%

Up

Natural gas (Nymex)

USD 2.70

+2.4%

Down

Gold

USD 1,888.90

-0.1%

Down

BTC

USD 23,514.90

-1.6%

The EGX30 rose 0.4% yesterday on turnover of EGP 1.2 bn (12% below the 90-day average). Foreign investors were net sellers. The index is down 22.0% YTD.

In the green: EFG Hermes (+5.0%), Qalaa Holdings (+4.3%) and GB Auto (+4.2%).

In the red: CIB (-0.8%), Oriental Weavers (-0.7%) and Elsewedy Electric (-0.4%).

Asian markets are largely in the red this morning with the exception of Shanghai and futures suggest it’s going to be a rough start to the week in Europe and on Wall Street when markets open later today.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

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