Tadawul Review:

Tadawul All Share Index (TASI) tumbled by 2.2% (-282 points) on the opening day of the week to close at 12,322 levels, the biggest decline since 19th May. The market decline started from the very beginning of the session and lasted till the very end. The drop in TASI was broad-based with 19 of 20 sectors closing in the red while Telecom being the only exception thanks to bonus shares of (1:1.5 bonus shares for every existing share) announcement by STC. The advance to decline ratio of 0.045x mirrored a similar trend with only 9 stocks closing up. Banks (-1.9%), Materials (-3.1%), and Energy (-3.0%) cumulatively pulled the index down by 179 points alone. Amongst the stocks, ARAMCO (-3.0%), SNB (-2.0%), and Al Rajhi Bank (-1.2%) contributed the most to the index decline while STC (+6.6%), unsurprisingly, was the top gainer for the day. Overall, trading activity posted a recovery with volume and value rising by 15% and 32% to 174mn shares and SAR7.4bn.

 

Market Wrap International:

Investors are unlikely to enjoy a respite from recent market volatility, with the Fed's effort to control inflation dominating next week's activity and supply chain difficulties persisting in virtually every industry. Leading up to the FOMC rate announcement on June 15 and related press conference with Fed Chairman Jerome Powell, economic reports on producer prices, retail sales, and manufacturing all fall into the laps of investors. Following a strong CPI data, the probability of a 75-point rate rise increased from 5% to 20%, adding some drama to the meeting. Next week's investor events include Cisco, the New York Times, and Splunk (SPLK), while the Kroger earnings release has the ability to either jolt or calm investors.

The European Central Bank has fired the starting gun on interest rates, announcing a 25-basis-point increase in July. Meanwhile, the Bank of England is expected to hike interest rates for the sixth time in a row on Thursday. Data from the UK labor market earlier this week should strengthen the case for reducing support. The job market remains strong, and the recent round of fiscal stimulus from the government has decreased the chance of a recession. In the future, the central bank is likely to have to tighten more than current predictions suggest. The UK GDP report for April is expected to indicate a 0.1% decrease in output. This comes on the heels of a similar decline in March.