Forthcoming Fed meeting minutes dictate flat open for markets

written on November 23, 2022

The war in Ukraine has tended to increase uncertainty regarding inflation and growth prospects. When and with what consequences this war will end is pure speculation, but capital markets are expected to build a certain immunity to the headline risks in the coming weeks. The medium- to long-term consequences, on the other hand, could be significant. It is possible that we are at the beginning of a new bloc formation or a new Cold War. This would put a significant damper on globalization and further fuel higher structural inflation. 

European equity markets closed higher on Tuesday, with the benchmark Stoxx 600 up more than 0.5% to three-month highs and the German DAX also rising above 14,430, the highest since early June. Oil and gas stocks jumped more than 4.5% to lead gains in the Old Continent, followed by a 2.5% gain in mining shares as commodities prices rebounded. Dow Jones Industrial Average futures rose by 14 points, or 0.05%. S&P 500 futures gained 0.03%, while Nasdaq 100 futures dipped 0.06%. The Dow Jones Industrial Average rallied nearly 400 points, or about 1.2%, during the regular session Tuesday. The S&P 500 rose 1.36%, closing above the 4,000 level for the first time since September. Meanwhile, the Nasdaq Composite jumped 1.36%. 

Summary

  • US stock futures were little changed on Tuesday night as investors looked ahead to the Federal Reserve meeting minutes for clues into the pace of future interest rate hikes.   
  • The OECD expected growth next year of just 0.5% in the Eurozone, with Germany's Russian-gas-dependent economy contracting 0.3%. 
  • Investors shrugged off fears of further lockdowns in China after the country reported its first Covid deaths since May. Instead, traders focused on some strong earnings reports, and bet on the likelihood for an easing in monetary policy from the Fed going forward. 
  • Equities advanced in Asia following a rally on Wall Street, with gains in Hong Kong-listed technology stocks amid speculation that China’s regulatory crackdown on the sector may be closer to ending. 
  • Equities in London rallied roughly 1% on Tuesday, with the blue-chip FTSE 100 closing just shy of 7,500 points, its highest in more than two months, driven by gains among energy and heavyweight materials stocks. Oil titans BP and Shell were among the biggest gainers on the index, up nearly 6% and 5%, respectively, while Glencore jumped 4%, as shares of these companies tracked higher commodities prices. 
  • Russia has threatened to reduce gas supplies to Moldova while Ukrainians have been warned blackouts could last months. 
  • WTI crude futures rose above $81 per barrel on Wednesday, extending gains from the previous session as supply-side uncertainties overshadowed demand concerns. Investors awaited further details on G7 plans to cap Russian oil and worried about how Russia would respond after it previously stated that it won’t sell crude to countries that adopt such measures. 
  • Shares of Nordstrom fell more than 8% in extended trading after the department store chain reaffirmed its forecast. However, Nordstrom beat profit and sales expectations in its latest results, according to consensus expectations on Refinitiv.   
  • HP has announced it will be laying off 4,000-6,000 employees globally over the next three years. 
  • Credit Suisse is planning deep China job cuts following its recent expansion. The Swiss lender plans to cut one-third of China bankers and 40% of research Bank to cut 2,700 jobs globally this quarter to reduce costs. 
  • As Coinbase shares slide, Morgan Stanley have listed major firms with potential FTX exposure. 

Redefine the way you grow and manage your money today!

Life’s full of mysteries. Your money shouldn’t be one of them.

Redefine the way you grow and manage your money today!

Life’s full of mysteries. Your money shouldn’t be one of them.