In This Article:
The Majors
It was a mixed week for the majors in the week ending 3rd December.
The CAC40 rose by 0.38%, while the DAX30 and the EuroStoxx600 ended the week with losses of 0.57% and 0.28% respectively.
While the economic calendar was on the busier side in the week, market sentiment towards FED monetary policy and COVID-19 did the damage.
Early in the week, FED Chair Powell delivered testimony on Capitol Hill. Powell talked of the need to discuss accelerating the tapering of bond purchases and the need to drop “transitory” in reference to inflation.
For the markets, concerns over the Omicron strain also weighed. Uncertainty over the efficacy of existing vaccines against the new strain tested support for riskier assets. This was exasperated by comments from Moderna CEO Stephane Bancel, who believed that existing vaccines would be less effective against the new strain.
The Stats
Member state and Eurozone inflation and private sector PMIs for November were the key stats.
Inflationary pressures continued to pick up, with the Eurozone’s annual rate of inflation accelerating from 4.1% to 4.9%.
Private sector PMIs were largely market positive, with the Eurozone’s composite PMI up from 54.2 to 55.4.
Other stats included French consumer spending and German unemployment figures, which were mixed.
Consumer spending fell in France, while unemployment fell in Germany. With new restrictions being imposed across member states to curb the spread of COVID-19, the market response was muted.
From the U.S
Early in the week, consumer confidence was in focus. Rising consumer prices and new COVID-19 cases weighed, with the CB Consumer Confidence Index falling from 111.6 to 109.5.
Mid-week, ADP nonfarm payrolls and ISM Manufacturing PMI numbers were market positive, however.
In November, the ADP reported a 534k increase in nonfarm payrolls, with the ISM Manufacturing PMI up from 60.8 to 61.1.
On Thursday, jobless claims increased from 194k to 222k in the week ending 26th November.
More significantly, however, continuous jobless claims fell from 2,063k to 1,956k. The fall to sub-2,000 was the first since March 2020, when continuous jobless claims had stood at 1,803k on 20th March.
Continuous jobless claims had peaked at 25,073k back in May 2020.
At the end of the week, nonfarm payrolls and ISM Non-Manufacturing PMI figures were the key stats, however.
In November, nonfarm payrolls rose by just 210k. While the rise was modest, the unemployment rate fell from 4.6% to 4.2%. This was in spite of the participation rate increasing from 61.6% to 61.8%.
Service sector PMIs also impressed, with the ISM Non-Manufacturing PMI rising from 66.7 to 69.1 in November.