Today’s Trading Playbook
KEY THEMES
U.S. equities rebounded yesterday, after the Fed said it would end its bond purchases in March as it gradually stops policies originated at the beginning of the health crisis. This comes following the Fed’s two-day policy meeting, where the Fed signaled that its inflation target has been met, and accordingly its announcement on ending the asset purchases has prepared for around 75bps interest rate increases possibly by end of 2022. Furthermore, Asian stocks rose, following the Fed announcement to gradually end its monetary stimulus, yet at the same time giving signals of a strong economic outlook stepping into 2022. Meanwhile, oil prices gained in early Thursday’s trading in light of U.S. implied consumer petroleum demand surging to a record high even as COVID-19’S Omicron variant still threatens to derail oil consumption globally.
Here at home, EGX 30 ended Wednesday almost flat, yet it’s still up 7% ytd and 2% since the beginning of December. We remind you that December is usually a good month for EGX 30, as the usually index likes to end on a good note. Average overall monthly performance in December since 2015 is 5%. It’s worth noting that EGX 30 is currently traded at forward P/E of only c.7x, implying an earnings yield of 14%, which is considered acceptable in view of the index historical profile.
Now, on to the top news and analysis for the day.