Tadawul Review:

Tadawul All Share Index (TASI) started the proceedings after Eid holidays on a positive note, rising by 86points to set a new multi-year high of 13,820. The index sidestepped the worries of volatility in international markets in the last few sessions and made a strong positive opening. Banks (+1.7%), energy (+2%) and Insurance (+1.5%) were the major drivers of the index performance. Material sector received a battering (-1.6%) due to concerns on agri and industrial metals prices. Trading volumes remained broadly flat at 146mn shares relative to the last trading session before Eid. Combination of strong results for banks, hike in benchmark rates by Fed and a strong rebound in energy prices inspired a rally in TASI on Sunday. The index is likely to maintain its positive momentum in the near-term.

 

Market Wrap International:

Following a significant decline in the stock market, investors will be put to the test again next week, with Federal Reserve speakers on the road again and the latest consumer price report expected to fall, giving inflation watchers plenty to chew on. The consumer price index is predicted to rise 0.2% month over month, with the year-over-year inflation rate falling to 8.2% from 8.5%. The inflation news comes as the 10-year Treasury yield has just crossed the 3% mark for the first time since late 2018, closing the week at 3.13%. In the electric vehicle sector, Elon Musk, the CEO of Tesla, will speak at a major auto symposium, and Rivian Automotive will complete its IPO lockup period for early investors.

In the coming week, data is expected to show that Europe's prognosis is deteriorating. The first-quarter GDP results for the United Kingdom may appear robust at first glance, but the March reading is likely to reveal a lack of momentum, which might lead to the economy contracting in the second quarter. Despite this dismal picture, the Bank of England raised interest rates for the fourth time in a row on May 5, bringing the benchmark rate to its highest level since 2009. The central bank is fighting to keep inflation under control and prevent the economy from entering a recession. Some companies reported halting output in March due to supply restrictions aggravated by Russia's invasion of Ukraine, thus industrial production data for the euro area are likely to show rising issues.