DAILY MARKET REPORT

19.07.2021

Index Last Change DJIA 34,687.85 299.17 S&P 500 4,327.16 32.87 NASDAQ 14427.24 115.89 NIKKEI 27,613.88 389.20 HANG SENG 27,548.51 456.17 DJ EURSTOXX 50 4,035.77 20.62 FTSE 100 7,008.09 3.93 CAC 40 6,460.08 33.28 DAXX 15,540.31 89.35

 US

Dow futures drop more than 100 points after major averages post first negative week in four

U.S. index futures were lower during overnight trading on Sunday, after the major averages posted their first negative week in four.

Futures contracts tied to the Dow Jones Industrial Average slid 169 points. S&P 500 futures and Nasdaq 100 futures both also traded in negative territory.

The Dow and S&P fell 0.52% and 0.97% last week, respectively. The Nasdaq Composite, meanwhile, was the relative underperformer, dropping 1.87%, to post its worst week since May.

Inflation fears weighed on , with a U.S. consumer sentiment index from the University of Michigan released on Friday showing that consumers believe prices will jump 4.8% over the next year. This is the steepest climb since August 2008. Earlier in the week, the June Consumer Price Index showed that inflation jumped 5.4% year-over- year, spooking .

On the flip side, retail sales numbers released Friday came in better-than-expected, rising 0.6% in June compared to expectations of a 0.4% decline.

“Inflation is still being driven by a relatively narrow range of goods and services impacted by the pandemic,” UBS said in a recent note. “We do not see inflation yet as a barrier to further gains in equity markets,” the firm added. UBS recently hiked its June 2022 price target for the S&P 500 to 4,650.

A busy week of earnings is on deck, with nine Dow components set to report and 76 S&P companies will provide quarterly updates. United Airlines and American Airlines will report, as will social media companies Snap and Twitter. CSX, Johnson & Johnson, Coca- Cola, Honeywell, IBM, Intel and Netflix are also on the docket.

The largest banks kicked off earnings season last week, and analysts at BMO noted that ahead of the start to earnings season 66 companies in the S&P 500 issued positive earnings guidance for the quarter, which is the largest since at least 2006.

“Q2 earnings season is here and another stellar reporting period is expected for US stocks with the S&P 500 y/y EPS growth rate currently sitting at 65.5%, which would mark the strongest clip since Q4 ’09,” the firm said in a recent note to clients.

On the economic data front, the National Association of Home Builders will release its latest survey results on Monday, giving consumers a glimpse into sentiment across the housing market. Economists polled by Dow Jones expect the reading to be unchanged from the prior month at 81. Anything above 50 is considered positive sentiment.

For the month of July, the Nasdaq Composite is down 0.5%. The S&P 500 and Dow are in the green, however, rising 0.7% and 0.5%, respectively. The Russell 2000 is down more than 6% amid weakness in small caps.

“The composition of recent data suggests that inflation will largely prove transitory as the Fed has stated,” said LPL Financial Chief Market Strategist Ryan Detrick. “Just how ‘transitory’ will prove to be is the big question. We are in the middle of the season when we expected to see some hot prints, so this week has not necessarily been a surprise.”

 EUROPE & UK

European markets set to open sharply lower as investors digest OPEC deal

 European stocks are expected to open sharply lower on Monday as markets digest the latest OPEC + announcement regarding oil production and continue to brood on inflation.  Britain’s FTSE is seen opening 50 points lower at 6,953, Germany’s DAX 85 points lower at 15,440, France’s CAC 40 down 36 points at 6,416 and Italy’s FTSE MIB down 208 points at 24,472, according to IG.

European stocks are expected to open sharply lower on Monday as markets digest the latest OPEC + announcement regarding oil production and continue to brood on inflation.

Britain’s FTSE is seen opening 50 points lower at 6,953, Germany’s DAX 85 points lower at 15,440, France’s CAC 40 down 36 points at 6,416 and Italy’s FTSE MIB down 208 points at 24,472, according to IG.

European markets look set to follow their counterparts in Asia Pacific lower on Monday as investors digest the news that OPEC and its allies (a group known as OPEC+) reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supply from the group will start in August, OPEC said in a statement.

The development comes after Brent has surged more than 40% so far in 2021, with demand for crude rising as the global economy recovers from the pandemic.

On Monday morning, international benchmark Brent crude futures slipped 0.87% to $72.95 per barrel. U.S. crude futures also declined 0.93% to $71.81 per barrel.

U.S. stock index futures were lower during overnight trading on Sunday, after the major averages posted their first negative week in four.

Inflation fears are weighing on stocks after the Consumer Price Index in the U.S. last week showed that inflation jumped 5.4% in June year-over-year, spooking investors. Separately. a U.S. consumer sentiment index from the University of Michigan released on Friday showing that consumers believe prices will jump 4.8% over the next year. This is the steepest climb since August 2008.

Meanwhile, in Europe, the devastation caused by massive flooding around Germany and Belgium could weigh on sentiment in the region this week, as well as ongoing coronavirus concerns.

A surge in Covid-19 cases across the continent caused by the highly transmissible delta variant continues to weigh, with several major European countries forced to reimplement social restrictions, while the U.K. is set to lift most remaining restrictions on Monday despite reporting a high number of daily cases.

There are no major earnings Monday; data releases include U.K. house price data from Rightmove and euro zone construction output.

 ASIA

Major Asia markets fall more than 1%; oil prices slip after OPEC and allies reach deal

 Shares in Asia-Pacific fell in Monday trade.  Investors watched for movements in oil after OPEC and its allies reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022.  In the afternoon of Asia trading hours on Monday, international benchmark Brent crude futures slipped 1.06% to $72.81 per barrel. U.S. crude futures also declined 1.09% to $71.03 per barrel.

SINGAPORE — Shares in Asia-Pacific slipped in Monday trade, as oil prices fell after OPEC and its allies reached a deal.

The Nikkei 225 in Japan dropped 1.46% in afternoon trade while the Topix index shed 1.39%. South Korea’s Kospi fell 0.91%.

In Hong Kong, the Hang Seng index slipped 1.59% by the afternoon. Mainland Chinese stocks also declined, with the Shanghai composite down about 0.3% while the Shenzhen component dipped fractionally.

Australian stocks also declined as the S&P/ASX 200 dropped 0.85%.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.19%.

Oil prices fall after OPEC+ deal In the afternoon of Asia trading hours on Monday, international benchmark Brent crude futures slipped 1.06% to $72.81 per barrel. U.S. crude futures also declined 1.09% to $71.03 per barrel.

Shares of oil firms in Asia-Pacific also declined in Monday trade, with Santos in Australia falling 2.56%. Japan’s Inpex dropped 2.1%, while Japan Petroleum Exploration plunged 2.56%. CNOOC shares in Hong Kong slipped 1.35%.

OPEC and its allies reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supply from the group — collectively known as OPEC+ — will start in August, OPEC said in a statement.

The development came as Brent surged more than 40% so far in 2021, with demand for crude rising as the global economy recovers from the pandemic.

Currencies The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.726 following a recent climb from below 92.4.

The Japanese yen traded at 109.94 per dollar, stronger than levels above 110.4 seen against the greenback last week. The Australian dollar changed hands at $0.7387, lower than levels above $0.748 last week.

Economic Release

 Europe and UK

Event Survey Prior EUR : CONSTRUCTION OUTPUT - -2.17%

 US and Canada

Event Survey Prior

US: 6 MONTH BILL AUCTION - 0.050%

DOMESTIC MARKET

Stocks Last Close Change Volume

SOLIDERE A 25.34 24.78 0.56 46742 SOLIDERE B 25.26 24.83 0.43 17656 HOLCIM 17.73 17.73 0.00 0 BLOM GDR #N/A N/A #N/A N/A #N/A N/A 0 BLOM BANK 3.33 3.33 0.00 0 AUDI 2.1 2.1 0.00 0 BYBLOS BK 0.96 0.93 0.01 6800

FOREIGN EXCHANGE

Currencies BID ASK EUR/USD 1.18 1.185 GBP/USD 1.375 1.379 USD/JPY 109.9 110 USD/CAD 1.264 1.2675 USD/LBP 1510 1520 USD/CHF 0.92 0.9225

Commodities Spot Closing GOLD 1811.86 1812.05 SILVER 25.4845 25.6641 CRUDE OIL 71.12 71.81

Market Summary

Commodities

Gold prices rise due to lower U.S. bond yields and virus worries

 B r Gold prices edgede higher on Monday as a fall in U.S. Treasury yields and concerns over a global economicn recovery slowdown due to the spread of the delta variant of the coronavirus lifted demandt for the safe-haven metal. c Fundamentalsr Spot gold wasu up 0.2% at $1,814.38 per ounce by 0057 GMT. d U.S. gold futurese edged up 0.1% at $1,816.40. f Benchmark 10u-year Treasury yields dropped to a near two-week low at 1.2640%, reducing t the opportunity cost of holding non-interest bearing gold. u

r Asian shares eslipped again as risk appetite was soured by fears of rising inflation and a relentlesss surge in coronavirus cases. r Gold is used aso a safe investment during times of political and financial uncertainty. It is also seen as a hedges against inflation. e Many countries,1 particularly in Asia, are struggling to curb the highly contagious delta variant of the coronavirus5 and have been forced into taking lockdown measures. c More than 190.45e million people have been reported to be infected by the novel coronavirus globally and 4,254,285n have died, according to a Reuters tally. t On the physicals side, gold in India was sold at a discount last week for the first time in nearly a month, as a jump in local prices curbed purchases. Buyers in other major Asian hubs were also puto off by higher prices. r SPDR Gold Tru0 st, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.6% to 1,028.55. tons on Friday, the lowest since May 14. 2

% , t o $

6

Speculators raised their net long positions in COMEX gold in the week ended July 13, data from the U.S. Commodity Futures Trading Commission showed.

Silver rose 0.2% to $25.72 per ounce, palladium climbed 0.6% to $2,645.98, and platinum was steady at $1,103.15.

OIL

Oil falls more than 1% after OPEC+ agrees to boost supply

 Brent crude was down $1, or 1.4%, at $72.59 a barrel by 0037 GMT, after falling nearly 3% last week.  U.S. oil was down 94 cents, or 1.3%, at $70.87 a barrel, having declined almost 4% last week

Oil prices fell more than 1% on Monday, hit by an agreement over the weekend within the OPEC+ group of producers to boost output after an earlier pact fell apart due to objections from the United Arab Emirates (UAE).

Brent crude was down $1, or 1.4%, at $72.59 a barrel by 0037 GMT, after falling nearly 3% last week. U.S. oil was down 94 cents, or 1.3%, at $70.87 a barrel, having declined almost 4% last week.

OPEC+ ministers agreed on Sunday to increase oil supply from August to dampen prices that earlier this month climbed to the highest in around two and a half years as the global economy recovers from the Covid-19 pandemic.

The group, which includes members of the Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, together known as OPEC+, agreed new production shares from May 2022.

“This agreement should give market participants comfort that the group is not headed for a messy breakup and will not be opening up the production floodgates anytime soon,” RBC Capital Markets said in a note.

OPEC+ agreed new production quotas for other members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

The group last year cut output by a record 10 million barrels per day (bpd) amid an evaporation in demand the pandemic developed, prompting a collapse in prices with U.S. oil at one point falling in negative territory.

It has gradually brought back some supply, leaving it with a reduction of around 5.8 million bpd.

FX

Dollar firm as delta virus threat looms over ‘Freedom Day’

 The U.S. dollar index held at 92.729, not far from last week’s three-month top of 92.832  The Aussie was last down 0.2% at $0.7381 and the New Zealand dollar also fell 0.2% to $0.6986.  The yen, which rose broadly, was up 0.2% at 109.90 per dollar and up by about the same at 129.69 per euro.

The dollar sat near its highest levels in months on Monday as the spread of the delta coronavirus variant made investors nervous about the global recovery and sent money into safety.

The risk-sensitive Australian dollar fell to its weakest against the greenback since December early in the Asia session and hit a five-month low against the safe-haven yen.

The dollar also rose broadly against Asian currencies.

Daily infections have been surging from the United States and Europe to Asia and the global seven-day average of new cases each day is over half a million for the first time since May.

Traders are holding their breath as England lifts most social curbs.

The Aussie was last down 0.2% at $0.7381 and the New Zealand dollar also fell 0.2% to $0.6986. The yen, which rose broadly, was up 0.2% at 109.90 per dollar and up by about the same margin at 129.69 per euro.

“The market is really trading on the uncertainty in the air around Covid,” National Australia Bank senior currency strategist Rodrigo Catril said on the bank’s morning podcast.

“That is the dominant factor,” he said, though adding a surprise fall in U.S consumer sentiment had also unsettled investors.

The U.S. dollar index held at 92.729, not far from last week’s three-month top of 92.832. The euro fetched $1.1801, just a touch away from last week’s three month low of $1.1772.

The week’s data calendar is fairly bare until Friday, when global purchasing managers’ index figures are published, with policy and virus response expected in focus in the meantime as lockdowns tighten and expand in Asia.

There is an outside chance China’s benchmark loan prime rate is lowered on Tuesday and the European Central Bank, which meets on Thursday, has flagged a guidance tweak.

Sterling, meanwhile, teetered at $1.3755, its lowest in more than week, as hopes ride on so called “Freedom day” with England betting its rush to vaccinate the population will mean people are less likely to fall seriously ill with Covid-19.

Relaxed rules have already been greeted by a mixture of nerves and excitement by London clubbers in the wee hours, but the day also begins with epidemiologists skeptical and the prime minister, finance minister and health minister themselves isolating as cases spread.

“The Netherlands relaxed all restrictions and saw cases soar from 500 to 10,000 per day in two weeks, and the government has had to reverse course and is now waiting nervously to see what happens to hospitalizations,” said analysts at ANZ Bank.

“The UK’s ‘freedom day’ today has some worried it could have a similar experience.”

Cryptocurrencies were steady in morning trade, with bitcoin holding near strong support at $31.590.

Elsewhere the dollar continued its march higher on Asia’s emerging market currencies, sending the tourism-dependent Thai baht to a fresh 15-month low and the Malaysian ringgit to its lowest in nearly a year.

This report is published for information purposes only. The information herein has been compiled from, or based upon sources we believe to be reliable, but we do not guarantee or accept responsibility for its completeness and accuracy. This document should not be construed as a solicitation to take part in any investment, or as constituting any representation or warranty on our part. The consequences of any action taken on the basis of information contained herein are solely the responsibility of the recipient.

Creditbank - Treasury and Capital Markets Tel & Fax: +961 1 485 265 / 269