Stocks are defensive to prop up the S&P 500, ignoring speculation of a fifth FFR 75Bps gain in December. On the other hand, aggressive Hawkish concerns and weakening crude oil demand by China put pressure on energy stocks. The crude oil price was corrected 2% on Friday, with Brent and WTI closed at USD87.62/Barrel and USD80.08/Barrel, respectively. Crude oil price pressures were also influenced by the Strong Dollar, which is still relatively strong, making oil prices more expensive for non-US buyers. Additionally, the US property market is being pressured again with Oct. Existing Home Sales MoM fell – 5.9% (Vs. Sept. -1.5%), as the 30Y Fixed Mortgage Rate touched 7% in October, the highest level since 2002.
China is projected to hold back its benchmark lending rate to support economic growth without lowering the Yuan. According to a Bloomberg survey, data showed that China’s 1Y and 5Y Loan Prime Rates in Nov. are projected at 3.65% and 4.30%, respectively (Vs. Oct. 3.65% and 4.30%). The People’s Bank of China (PBOC) is predicted again to maintain its benchmark lending rate for the third month straight, propping up an economic slowdown and anticipating capital outflows from China. On the other hand, the lack of domestic sentiment makes JCI relies on external factors today. Thus, at this beginning of the week, NHKSI Research projects JCI to move sideways.
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