US inflation data spikes to 30-year highs
Black Friday sees stocks routed as omicron covid-19 variant concerns hit markets
Gold touches 5-month high as Bitcoin rallies to record $69,000
Turkish lira slumps amid rising economic woes
November saw the global markets face two major hurdles, with major stock indexes seeing a run of consecutive weeks of gains ended. The release of US inflation data for October, which showed the highest rising inflation year-over-year in 30 years, and economic woes in Europe, as well as China, contributed to a slowdown for the S&P 500, and other stock indexes.
With hours to the end of the month, there’s now a fresh concern given the discovery of a new covid-19 variant and comments that the strain could prove problematic for current vaccines.
Here are the top market stories for November.
US inflation data hits 30-year highs
In October, consumer price index (CPI) data for the US showed that inflation rose highest since 1990. The data, which showed the economy weakened by 6.2% year-over-year in October, was hotter than expected.
Stock markets rode the inflation narrative to move higher as the Federal Reserve signaled its intention to reign in runaway inflation by agreeing to a tapering of its $120-billion a month bond purchases.
The nomination of Jerome Powell as the Federal Reserve Chair also happened in November, with market observers looking to a hawkish Fed even as policymakers revealed a willingness to increase interest rates earlier than forecast.
Tapering the quantitative easing program has helped the dollar against its peers, but has seen equities and gold suffer.
Black Friday rout for stocks
Stock markets were highly volatile in November, but gains made earlier in the month were wiped out on Black Friday. On a shortened US trading day due to the Thanksgiving holiday, Wall Street led global indexes in turning red as stocks plummeted on news of omicron, a new Covid-19 strain initially feared to lead to travel restrictions and national lockdowns across the world.
While losses for the S&P 500 and Dow Jones Industrial Average hit above 3%, the FTSE 100’s 3.7% slip saw it hit the biggest one-day dump in over a year. The benchmark pan-European Stoxx 600 index also slipped close to 4% to touch lows last seen in June 2020.
The biggest losers on Friday were travel stocks while vaccine makers saw an uptick, led by Moderna that leaped more than 24% on the day.
Turkish lira meltdown
The Turkish lira plunged by more than 12% on Tuesday, 23 November, hitting a shocking new floor against the dollar. At the time of writing, cumulative losses for the lira in November stand at over 36%, with the currency down to 13.11 to the dollar and now well below the support levels around 11.00.
The lira’s sharp sell-off appears to have been catalysed by economic woes, with the country’s leader President Recep Tayyip Erdogan not helping with comments supporting the central bank’s stimulus measures amid rising inflation.
Gold pricks 5-month barrier as Bitcoin hits $69k
On 15 November, gold, aided by increasing risk-on sentiment among investors, reached a high of $1865.35 per ounce for its highest level since June. Despite this, gold has failed to maintain an upward trajectory and is 0.3% down in the past 30 days.
Bitcoin also peaked in November, with the pioneer cryptocurrency racing to an all-time high of $69,044. This happened amid increased institutional adoption and the approval of the first Bitcoin futures-based ETFs in the US.
The leading cryptocurrency however slumped nearly 10% on Black Friday, its losses mirroring those in the stock market. Bitcoin currently trades near $58,300, and although it's up nearly 220% this past year, it's about 6% down in the past 30 days. However, analysts say it remains bullish and could still hit a new peak before the end of the year.