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G&T Team
ResearchResearch Reports Global Equity Markets, 28 November 2022

Global Equity Markets, 28 November 2022

Global macroeconomic summary

Euro area reported better than expected consumer confidence and PMIs for November. Consumer confidence improved more than expected to reach the June level. The upwards trend since September may be the start of a gradual recovery of European consumer sentiment. Meanwhile, manufacturing PMI improved slightly for the first time in 3 months, while services stayed unchanged. Importantly, both manufacturing and services PMIs remain in contraction territory for the fourth consecutive month. As a last note, German GDP grew slightly more than expected at 1.3% y/y in 3Q22.

In the US, macro news were mixed, with higher-than-expected growth in durable goods orders and slightly reduced consumer confidence. It is worth noting, however, that the US consumer confidence had an upwards trend in past 5 months and November figure may be a mere outlier. Durable goods orders, on the other hand, has been growing with increasing pace since July, illustrating steadily improving producer expectations on mid-to-long term demand. 

Global inflation has likely peaked, as suggested by leading indicators. Shipping costs, commodity prices, and inflation expectations all seem to be declining on a global scale. Moreover, the supply chain disturbances also seem to have eased globally, providing additional downward pressure on producer prices. 
Most importantly, however, it is the actual inflation figures that underlie economists’ optimism. Inflation is decelerating rapidly in emerging markets as well as in many developed economies, predominantly in continental Europe. 
However, the risk of high commodity prices, especially in energy products, remains sizeable and is likely to materialize given the geopolitical tensions do not ease in the near future.