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Key Takeaways:
- US stocks wavered but set records amid elevated inflation concerns and uncertainty
- European stocks rose to an all-time high while bitcoin fell to its lowest point for November
Increasing Uncertainties in the Holiday Season
The global financial markets experienced renewed jitters during the week as investors scrambled to position their portfolios. Among other uncertainties, inflation pressures weighed on US stocks, but investors pressed forward. As a result, the S&P500 and the Nasdaq Composite posted new all-time records.
In Europe, on the other hand, stocks performed remarkably well as they also set record highs amid positive earnings reports. In more detail, the pan-European Stoxx Europe 600 gained earlier in the week, reaching an all-time high near 490.00.
Still, on both sides of the Atlantic, investors increased their concerns that inflation will most likely remain. The expected new reality is in contrast to what central banks around the world have predicted. More precisely, the US Federal Reserve, and the European Central Bank, projected inflation will gradually ease as the economic reopening unfolded.
Return of Inflation Pressures Weighs on Sentiment
This said, UK inflation and euro zone inflation for October arrived hotter than expected. For example, the UK consumer price report showed inflation rose 4.2% in October, compared with a year ago. Euro zone inflation, in the meantime, arrived at 4.1% for the same period. In addition, Canada’s inflation for October jumped 4.7%, an 18-year high.
As a result of surging prices in the UK, the British pound rallied to a 21-month high against the euro. One of the few assets that gained this week, the sterling spiked above €1.19.
Also, the EUR/USD went through increased selling momentum. The pair dipped to a 16-month low near 1.1260.
Gold, meanwhile, failed to rise for the week. Even though the precious metal gave up its modest gains, gold prices peaked at a one-month high near $1,870 per troy ounce.
In cryptocurrency markets, bitcoin and alternative tokens could not sustain their strong upside swing from last week. In other words, bitcoin slipped under $60,000 and logged a loss for the week. Further, the original cryptocurrency snapped a seven-week winning streak.