Today’s Trading Playbook
KEY THEMES
Global equities rebounded soundly yesterday, with U.S. equities rising to snatch another all-time high. The new record high was achieved, backed by comforting data related to U.S. retail sales, coupled with receding fears of the new Omicron variant. Meanwhile, the oil market is in a good mood in early Tuesday’s trading, with Brent oil prices above the USD78/bbl level. It’s worth noting that natural gas prices rose on Monday after weather forecasts showed a bout of cold temperatures that could spur heating demand for parts of the U.S. this week. On the other hand, Asian shares are trending higher, on the back of improved synchronized sentiment towards Omicron. Elsewhere, the Turkish lira (TRY) performance against the USD has relatively stabilized within a range of 10.5-12 since last Thursday. The relative short term stability came in light of the exceptional measures taken by the Turkish government to help slowing down a vicious dollarization wave caused mainly by the country’s loose monetary conditions.
Here at home, both indices ended the day lower yesterday, despite opening the day on a bullish note. With three days left to go in 2021, we are still interested in the liquidity migration from small cap names to the large cap universe. Just yesterday, the market received the news that Macro Group Pharmaceuticals [MCRO] awaited IPO could be taking place next January. We believe that IPOs in general, as well as M&A are among the top themes for the market in 2022. We believe so as valuations for large caps are still very interesting, and so the completion of large and mega transactions in the space of IPOs and M&A should expedite the pace of re-rating for many over-looked and undervalued names.
Now, on to the top news and analysis for the day.