Kuwait: December 7, 2017
Global equities closed the month of November in the green with the MSCI All Country World Index up 1.8%. In the US, the investigation into Russia meddling in the 2016 elections continues to take center stage alongside President Trump’s tax overhaul plan, while in Europe, political uncertainty stemming from Angela Merkel’s failure to form a coalition government was cause for concern. In Asia, the escalation of words between the US and its allies and North Korea continues to make headlines. Commodities were up for the month with Gold posting a gain of 0.3% and Brent posting a gain of 3.6%. Supporting the rally in oil was OPEC and Russia’s announcement to extend cuts for an additional 9 months until the end of 2018.
In the US, the Markit Manufacturing Purchasing Managers Index (PMI) came in at 53.9 for the month of November, while the preliminary Services PMI came in at 54.7 retreating from the previous month’s reading of 55.3. The latest reading in November for Initial Jobless Claims came in at 238,000 compared to the previous reading of 240,000. Durable Goods Orders decreased by 1.2% in October, while Housing Starts and Building Permits increased reaching 1.290m and 1.297m respectively. Retail Sales, on the other hand increased by 0.2% month on month in October while Gross Domestic Product recorded an annualized 3.3% on a preliminary basis for the third quarter beating expectations.
US equities were up for the month of November 3.8% and 2.8% for the Dow Jones and S&P 500, respectively.
In the U.K., the Markit Manufacturing PMI increased to 58.2 in November from 56.6 while the Services PMI came in at 53.8. The Consumer Price Index (CPI) increased by 0.1% in October while Retail Sales increased 0.3%. The GDP for Q3 2017 remained stable compared to the previous reading and in line with expectations recording 1.5% year-on-year. Consumer Confidence continues to drop month on month, reaching -12 in November compared to October’s reading of -10.
UK equities ended the month down 2.2%, as measured by the FTSE 100.
In the Eurozone, the Markit Manufacturing PMI for November was flat compared to October at 60.1 versus 60.0 while the Services PMI came in at 56.2 unchanged from the previous month’s reading. Retail Sales decreased, month on month, by 1.1% in October compared to September. Consumer Confidence improved to 0.1 in November on a preliminary basis from the previous month’s reading of -1.1.
European equities closed in the red 2.2%, as measured by the Stoxx Europe 600.
In Japan, exports and imports increased by 14% and 18.9% respectively in October. In both cases, the readings were below expectations. The Nikkei Manufacturing PMI came in at 53.6 in October slightly below September’s reading of 53.8 while Retail Trade dropped 0.2% year on year as expected compared to the previous month’s reading of 2.3%. Housing Starts also dropped 4.8% year on year in October compared to the drop of 2.9% in September.
Japanese equities gained 3.2% in November as measured by the Nikkei 225.
In China, both imports and exports came in below expectations and below September’s figures. In local currency terms, imports grew by 15.9% versus an expected growth of 19% while exports grew at 6.1% compared to expectations of 7.9%. The CPI inched upwards by 0.1% month-on-month compared to the September’s reading of 0.5%. Retail Sales recorded a year-on-year growth of 10% in October, marginally lower than the 10.4% expected and September’s reading of 10.3%. The Caixin Manufacturing PMI for November came in at 50.8 slightly below the October reading of 51 while the non-manufacturing PMI increased to 54.8 from 54.3 in October.
The MSCI Emerging Market Index was slightly green for the month of November, gaining 0.2%. Chinese equities, on the other hand, closed down 2.2% in November as measured by the Shanghai Stock Exchange Composite.
The majority of the GCC equity markets performed poorly during the month of November. The MSCI GCC Countries Index closed in the red 1.1%. The worst performer during the month was Dubai’s equity market closing down 5.9% followed by Qatar down 5.5% and Kuwait and Abu Dhabi down 5.0% and 4.4%, respectively. On a positive note, Oman managed to close the month up 2.0% while Saudi Arabia and Bahrain recorded increases of 1.0% and 0.6% respectively. Egypt’s equity index, EGX 30, was up 1.7% for the month of November.