GCC markets show resilience amidst global turbulence

Curtain falls on 2Q 2023 earnings season
GCC markets show resilience amidst global turbulence
Global markets

In GCC markets, Oman (+0.6 percent) advanced helping recover its past week’s loss. Saudi Arabia (+0.2 percent) added to its past week’s gain, driven partly by Saudi Aramco which reportedly committed full volumes requested by its North Asian customers in September even as the Kingdom extends its voluntary output cut. Kuwait and Dubai (-0.3 percent) clocked identical minor declines.

The rest of the GCC markets showed Abu Dhabi (-0.8 percent) partially reversed its prior week’s gain. Bahrain (-1.0 percent), and Qatar (-1.5 percent) weakened for another week, with Qatar dragged down primarily by industrial and banking stocks.

The US markets closed in the red, weighed down by concerns over China’s deteriorating economic health, minutes of the recent Fed meeting suggesting interest rates will remain high for a longer period, and prospects of more credit rating downgrades of US lenders. While S&P 500 (-2.1 percent), and Nasdaq Composite (-2.6 percent) declined further, Dow Jones (-2.1 percent) reversed its past week’s gain.

Interest rates and China worries also battered European markets where FTSE100 (3.5 percent) fell the most, followed by CAC40 (-2.4 percent), STOXX600 (-2.3 percent), and DAX (-1.6 percent).

The Week Ahead

With the curtain falling on 2Q 2023 earnings, regional markets are set to be swayed by international economic indicators. An uptick in crude oil prices, spurred partly by a persistent decline in US rig counts, might infuse some optimism, even as 2023’s longest oil rally concluded on growth concerns.

On the corporate agenda, this week Abdullah Al Othaim, Al Mahhar, Emaar Development, Emaar Properties, Gulf Hotels (Oman), MCDC,

National Gas, Oman Fisheries, Oman United Insurance, and QGMD, among others, will host earnings calls for 2Q 2023.

Read: Another deluge of 2Q 2023 corporate earnings this week

Global markets – Focus will be on Jackson Hole Economic Symposium

In the US, Powell’s address at the Jackson Hole Economic Symposium stands out as the key highlight. Alongside, the market will closely watch economic indicators such as the July report on existing home sales, Flash PMIs, and the latest figures on jobless claims.

In the EU, investors are also eyeing flash PMI data, with prevailing sentiment suggesting potential weaknesses in both the manufacturing and service sectors of major economies.

Inflation metrics, anticipated to align with industry estimates, assume critical significance.

Meanwhile, in the UK, PMI readings are under the spotlight, with projections indicating a decline, particularly in the manufacturing and service domains, from their prior levels.

The 2023 Global Wealth Report, a collaboration between Swiss banks UBS and Credit Suisse, projects a 38 percent surge in global wealth, forecasting $629 trillion by 2027 from roughly $454 trillion at 2022’s close.

However, it highlighted a notable dip: 2022 marked the first annual decline in global private wealth since the 2008 financial turmoil, shedding $11.3 trillion from 2021. This downturn led to a 3.6 percent YoY reduction in wealth per adult for 2022, marking its second steepest decline since 2000. A resurgent US dollar was identified as a key factor behind 2022’s 5.8 percent YoY global wealth contraction.

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