Home > Markets weekly recap: US inflation readings, stocks rebound, oil climbs

Markets weekly recap: US inflation readings, stocks rebound, oil climbs

·         Stocks rebounded amid positive sentiment after the Omicron-related sell-off scare.

·         US inflation rose 6.8% in November year-on-year, the fastest pace since 1982.

·         UK data show the economy slowed down in October.

·         Oil prices were up in the week as OPEC+ meeting eases supply worries.

US stocks record close to 4% in weekly gains, S&P 500 sees the best week since February

Stocks had a relatively strong week after bouncing higher on Monday and Tuesday, with investors easing risk-off sentiment seen in mid-week to see global stocks end the week in green.

US benchmarks closed higher, making the best of late trading to nudge an average of nearly 4%. The S&P 500 closed 3.8% higher, its strongest weekly gains since February, while the Dow Jones Industrial Average edged +4%  and Nasdaq Composite was +3.6% higher.

In the week, technology stocks saw the most upside, climbing 6% as solid gains for Apple Inc (NASDAQ: AAPL), with a close of $179.45 (+2.8%) inching the giant’s market cap close to $3 trillion. 

Elsewhere, the energy sector changed by +3.8%, while healthcare stocks added 3.2% to illustrate market reaction around Omicron.

US large-cap value stocks lagged their growth counterparts, posting weekly gains of about 2.9% while the latter topped 4.4% to highlight market outlook as the traditionally favourable second-half of December rolls around.

European shares close lower but post best weekly gains since March

In Europe, shares closed lower on Friday, led by losses for the Stoxx 600 and UK’s FTSE 100, which declined 0.3% and 0.4% respectively. Despite this, weekly gains across the European markets hit an average of 3.1%, the highest level since March.

The pan-European Stoxx 600 Index closed at +2.76% for the week, while UK’s FTSE 100 edged +2.38%, France’s CAC 40 moved up 3.34%, and Germany’s DAX posted weekly gains of 2.99%.

US inflation rose fastest since 1982

On Friday, economic data showed US inflation increased at its fastest rate in nearly four decades. The consumer price index (CPI) for November was shown to have grown by 0.8% to see its year-over-year pace jump to 6.8%, the fastest such reading since June 1982. Core CPI rose 0.5%, ticking to 4.9% year over year and the highest it’s ever been since 1991.

Market reaction to the data was positive for US stocks, with gains for yields also highlighted.

UK economy slows down

The week also saw the release of UK economic data, with market action slightly pinned by investor reaction. The country’s gross domestic product (GDP) was shown to have expanded by a mere 0.1% in October, compared to 0.6% in September. The economic slowdown reflects inflation setbacks, with recent supply disruptions and pandemic concerns likely to impact the country in the short term.

Oil recovers after OPEC+ meeting

Oil prices saw a minor recovery over the week to end +1.44% in the green at close on Friday. The gains put crude oil up over the week to help the sector snap a five-week losing streak on the weekly log. The price of oil climbed to $71.96 per barrel, though it’s still below October highs of around $85.

The upside came after an OPEC+ meeting on Friday noted the planned hike of the output set for January was on course to happen. It is expected that crude will continue to see some upward action in the coming weeks, generally aligning with an anticipated end-of-year rally in the markets.

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