LIVE MARKETS Equities: the reasons to stay bullish in 2022

  • European equities down 0.1%
  • Insurers’ actions top the winners
  • BBVA down 0.3%, Telecom Italia extends its earnings
  • US futures in negative territory

November 24 – Welcome home for real-time market coverage presented by Reuters reporters. You can share your thoughts with us at [email protected]

EQUITIES: REASONS TO REMAIN bullish in 2022 (1033 GMT)

Going bullish on stocks with major stock indexes at their current levels can be a bit daring, but it all depends on the economic outlook and the next move from central banks.

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According to Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, “The Federal Reserve will not be forced to excessively tighten financial conditions and will continue to balance labor market developments with its goal of price stability.”

“As the pandemic disruptions subside, we expect year-over-year inflation rates in the United States to drop from 6.5% at the end of 2021 to 1.8% at the end of 2022,” he said. he stated in a research note.

“If this is the case, this will make it easier for the Fed to justify its maintenance until 2023,” he adds.

UBS expects global earnings growth of 10% in 2022, with cyclical stocks posting the highest earnings growth rates.

He likes eurozone and Japanese stock markets, global financials, US mid caps, commodities and energy stocks.

ERP

(Stefano Rebaudo)

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STOXX REBOND: OIL UP, TRAVEL DOWN (0912 GMT)

Some risk appetite returned to the markets, pushing the benchmark STOXX 600 Equity Index (.STOXX) up 0.5% when opening trades from three-week lows.

Oil and Gas (.SXEP) are the main sector gainers, up 1.3% after a US-led release of strategic reserves fell short of expectations, triggering a rebound in fuel prices. raw.

Other cyclical sectors were in demand as well, with banks (.SX7P) and miners (.SXPP) gaining around 1% or more, as concerns over new restrictions to tackle a fourth wave of viral infections sent travel stocks (.SXTP) at February lows.

Anguish over a currency crisis in Turkey appeared to loosen its grip on BBVA (BBVA.MC). Shares of the Spanish lender edged up from 4 months, after falling six times in the previous seven sessions.

Telecom Italia (TLIT.MI) climbed another 8% in large volumes, on media speculation The American fund KKR plans to raise its offer to win over reluctant shareholders like Vivendi (VIV.PA).

(Danilo Masoni)

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WAIT (0757 GMT)

If you were hoping that the eve of a major American holiday would bring some semblance of calm, think again.

First, ahead of Thursday’s Thanksgiving holiday, a plethora of US data is presented: initial weekly jobless claims, second impression of third quarter GDP, personal income and personal spending for October, new home sales and preliminary readings. of durable goods orders in October.

The PCE index, a key indicator of inflation, will be the center of attention given the recent spike in inflation to three-decade highs.

And not to mention the minutes of the last Fed meeting – the one where they announced the tapering – are also on the calendar.

In Europe, Germany’s closely watched Ifo activity indicator may better illustrate the impact of the resurgence in the number of COVID cases than Tuesday’s optimistic PMI figures.

All of this comes against the backdrop of increasingly turbulent global markets as investors position themselves for higher inflation and interest rates.

Equity markets were particularly angry with rising real or inflation-adjusted returns in major economies.

German inflation-linked 10-year bond yields jumped nine basis points to three-week highs on Tuesday, outpacing a 7 basis point hike in nominal borrowing costs. This came after hawkish comments on inflation by two ECB policymakers.

New Zealand’s central bank on Wednesday raised interest rates for the second month in a row to control soaring consumer prices. Read more

Still, European equity futures are higher this morning. On Wall Street, where higher Treasury yields have driven the tech-rich Nasdaq down for two straight days, futures are flat.

And don’t forget Turkey, where the pound is heading to record lows reached in Tuesday’s 15% crash.

With President Tayyip Erdogan defending the recent rate cuts, the lira is trading around 13 per dollar, down 22% since the start of last week. Contagion appears to be limited, but investors are watching closely.

Lira underperforms its emerging market peers

Key developments that should provide more direction to the markets on Wednesday:

– Toshiba’s largest shareholder opposes spin-off and urges board to solicit bids read more

– The activity of Japanese factories is growing at the fastest rate in almost four years read more

– ECB speakers: Isabel Schnabel, member of the ECB’s executive board

– Auction of 20-year Treasury bonds

(Dhara Ranasinghe)

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EUROPE: PROVISIONAL REBOUND (07.43 GMT)

European stocks look set to rebound from three-week lows at the open today after a late-session rally on Wall Street that saw the S&P 500 close with a marginal gain.

Rising US yields and volatile oil prices, however, caused a choppy session in Asia, with an MSCI gauge of Asia-Pacific stocks outside Japan sagging about 0.1%. Read more

Euro STOXX 50 and DAX index futures were just above par at the time of writing after rising around 0.3% previously, although FTSE contracts were a bit lighter.

In the previous session, the STOXX 600 pan-regional index (.STOXX) suffered its biggest one-day decline in about two months as a resurgence of COVID-19 cases raised fears of further restrictions.

instantaneous

(Danilo Masoni)

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