MARKET WRAPS
Watch For:
Texas Manufacturing Outlook Survey for September; Federal
Reserve Bank of Boston President Susan Collins speaks at Greater
Boston Chamber of Commerce event; Washington Post Live event with
Federal Reserve Bank of Atlanta President Raphael Bostic; Federal
Reserve Bank of Cleveland President Loretta Mester speaks at
Massachusetts Institute of Technology event
Opening Call:
Stock futures wavered early Monday, with risk assets extending
their selloff, as fears over inflation and the likelihood of a
global recession mounted.
In Europe, stock markets struggled for momentum, with London's
FTSE 100 edging into positive territory as sterling continued to
plunge.
The projected victory of a far-right party in Italy added to
market uncertainties about rising interest rates and recession
fears.
Read: Italian Right Is On Course to Win Elections
Other Markets News:
U.K. assets slid further after Chancellor of the Exchequer Kwasi
Kwarteng said in weekend interviews that the government would cut
taxes again.
Investors sold the pound and dumped government bonds, sending
two- and 10-year yields soaring.
Italian bond markets were steady, while the FTSE MIB stocks
benchmark rose 1.1%, outperforming European markets.
Forex:
The euro fell to a 20-year low against the dollar as the
greenback strengthened across the board and as investors digested
Sunday's Italian general election.
Far-right leader Giorgia Meloni claimed victory after exit polls
gave her coalition a clear majority.
The "biggest concern for investors" is whether the new far-right
Italian government will deviate from reforms under Mario Draghi
that helped Italy get the EU on its side, Swissquote Bank said.
EUR/USD could remain under pressure as Italian government bond
yields will rise further, widening the gap with other eurozone
yields, Swissquote said.
In terms of GBP/USD, Swissquote said parity is now "seen as
almost certain," after sterling continued its slide against the
dollar as investors reacted very negatively to Friday's
announcement of sweeping U.K. tax cuts and a cap on energy price
rises.
"What the market is hearing is: who will finance this spending?
The only hope here is to see at least a sugar rush in the British
economy to help investors digest information, but the next couple
of years will probably be harsh for the U.K.," Swissquote said.
Read: Dollar Could Extend Gains if Pound Plummets Further
Read Barrons.com: British Pound Sinks to Record Low Against the
Dollar
Energy:
Oil prices fell to the lowest levels since January following a
week of central bank interest-rate hikes that refreshed worries
about the strength of the world economy.
The stronger dollar was also weighing on oil. The ICE Dollar
index is at a fresh 20-year high, weakening demand for
dollar-denominated oil among holders of other currencies.
Metals:
Gold and base metals moved lower in early London trade as
investors still looked toward risk-off assets with the macro
sentiment remaining weak.
---
Any future aluminum-price surges on fresh production cuts are
likely to be brief, as demand fears outweigh tightening supply,
Citi said.
"The aluminum market has become reluctant to price in
power-related curbs, having switched its focus to concerns of
demand destruction amid supply-chain destocking."
Investors worry about a Europe-led recession amid increased
energy prices, tighter liquidity and China's pandemic-related
restrictions, Citi said.
But in the coming months, "any sizable power-related curbs in
Yunnan, China, or Europe may see transitory spikes in prices,"
while there is also the risk the London Metal Exchange may delist
or halt inflows of Russian metal, Citi added.
TODAY'S TOP HEADLINES
Credit Suisse Says Strategic Review is on Track
Credit Suisse Group AG on Monday said its comprehensive
strategic review is on track, including potential divestitures and
asset sales.
The Swiss bank said it will provide further updates when it
reports its third-quarter results on Oct. 27.
Amazon, Berkshire Hathaway Could Be Among Top Payers of New
Minimum Tax
WASHINGTON-A handful of large companies, such as Berkshire
Hathaway Inc. and Amazon.com Inc., could bear most of the burden
from a 15% corporate minimum tax President Biden signed into law
last month.
Researchers at the University of North Carolina Tax Center
analyzed securities filings to determine what companies would have
paid if the tax had been in place last year. They found fewer than
80 publicly traded U.S. companies would have paid any corporate
minimum tax in 2021, and just six-including Amazon and Warren
Buffett's conglomerate-would have paid half of the estimated $32
billion in revenue the levy would have generated.
Covid-19 Vaccine Rollout Carries Lessons for Pharma Supply
Chains, Says Pfizer Executive
Russia's War in Ukraine to Cost Global Economy $2.8 Trillion,
OECD Says
Russia's invasion of Ukraine will cost the global economy $2.8
trillion in lost output by the end of next year-and even more if a
severe winter leads to energy rationing in Europe-the Organization
for Economic Cooperation and Development said Monday.
The estimate by the Paris-based club of advanced economies lays
bare the magnitude of the economic fallout from Moscow's invasion
of its neighbor seven months ago, the worst military conflict on
the continent since World War II, which is Russia's attempt to
redraw the map of Europe by force.
Central Banks May Stoke Risks by Raising Interest Rates
Together
Central banks around the world are raising their key interest
rates in the most widespread tightening of monetary policy on
record. Some economists fear they may go too far if they don't take
into account their collective impact on global demand.
According to the World Bank, the number of rate increases
announced by central banks around the world was the highest in July
since records began in the early 1970s. On Wednesday, the Federal
Reserve delivered its third 0.75 percentage-point increase in as
many meetings. This past week its counterparts in Indonesia,
Norway, the Philippines, South Africa, Sweden, Switzerland, Taiwan
and the U.K. also upped rates.
China PBOC Raises Forex Risk Reserve Ratio for Forward
Trading
China's central bank said Monday that it would increase the risk
reserve requirement ratio for financial institutions when
conducting foreign-exchange forward trading, as the yuan faces
increasing depreciation pressure.
The People's Bank of China said the risk reserve requirement for
forward foreign-exchange sales will be raised to 20% from currently
zero. The move, which the central bank said is aimed at stabilizing
expectations in the foreign-exchange market, will take effect
Wednesday.
Japan's Intervention to Buy Yen Was Appropriate, BOJ Governor
Says
OSAKA -- Bank of Japan Gov. Haruhiko Kuroda said Monday that the
Ministry of Finance's decision to intervene in the currency market
last week by buying yen and selling dollars was an appropriate
move.
The recent weakening of the yen was "rapid and one-sided," Mr.
Kuroda said at a news conference after meeting with business
leaders in Osaka.
Buying the Stock-Market Dip Is Backfiring. Investors Keep Piling
In Anyway.
It is the worst year for buying the stock-market dip since the
1930s.
Instead of rebounding after a tumble, stocks have continued to
fall, burning investors who stepped in to buy shares on sale. The
S&P 500 has dropped 1.2% on average this year in the week after
a one-day loss of at least 1%, according to Dow Jones Market Data.
That is the biggest such decline since 1931.
British Pound Sinks to Record Low Against the Dollar
The British pound tumbled to a record low of $1.0349 against the
U.S. dollar early Monday as the U.K. government's planned tax cuts
continued to spook traders.
The pound also fell against all major global currencies,
slipping below EUR1.08 against the euro - its lowest level since
September 2020. The currency has recovered some ground, last
trading at $1.0721 and EUR1.1064.
German Business Sentiment Slumps Amid Energy Concerns
Business confidence in Germany worsened considerably in
September as companies turned more pessimistic due to the energy
crisis.
The Ifo business-climate index fell to 84.3 points in September
from a revised figure of 88.6 points in August, data from the Ifo
Institute showed Monday. This is its lowest value since May 2020.
Economists polled by The Wall Street Journal had expected the index
to come in at 87.1.
Slide in Transportation Stocks Flashes Warning About Economy
Shares of transportation companies are falling twice as fast as
the hard-hit U.S. stock market, reflecting investors' expectations
that a recession is likely ahead.
The Dow Jones Transportation Average, which tracks 20 large U.S.
companies ranging from airlines to railroads to truckers, has
declined 12% this month. The S&P 500 and the Dow Jones
Industrial Average are down about half that much.
Beating Inflation Is Easy Online-Except for Sellers
On the internet, inflation isn't a problem for shoppers.
Instead, it is one for the companies that sell there, with a
reputation for offering bargains.
Prices are rising much more slowly online than in the wider
consumer economy. During the pandemic, e-commerce businesses were
able to charge a bit more when shops were closed and demand surged,
but their pricing power is wearing off.
Carbon-Credit Surplus Could Soon Turn to Shortage
Hundreds of companies plan to achieve their climate goals using
carbon credits to offset the emissions they can't eliminate on
their own. Soon there might not be enough of the credits to go
around.
Despite record demand for carbon credits last year, supply of
new offsets has still outpaced demand. That has created a surplus
that has has kept most carbon credits cheap.
Crypto Investors Got Burned by Celsius. Then They Battled
Back.
Cryptocurrency lender Celsius Network LLC attracted scores of
people over the last five years who wanted to make money betting on
bitcoin. After a crypto crash pushed the company into bankruptcy
this summer, some of these amateur investors found unity around a
new goal: getting that money back.
Thousands of Celsius customers are gathering on social media
apps such as Telegram and Reddit to parse legal filings together,
pooling funds to pay for lawyers and making YouTube summaries of
developments at court hearings. Some are reading up on U.S.
bankruptcy law, providing translations for non-English speakers and
trying to engineer their own white-knight rescue deals.
Pensions Brace for Private-Equity Losses
Public pension funds are already reporting big losses in 2022.
Things are likely to get uglier.
That is because the funds, which manage around $5 trillion in
retirement savings for the nation's teachers, firefighters and
other public workers, haven't yet factored in second-quarter
returns on private equity and other illiquid investments.
Short Sellers Upended a Small Farm Real-Estate Company. This Is
What It Looked Like.
Andy Jenks, a sixth-generation Illinois farmer, owns shares in a
small real-estate investment trust called Farmland Partners Inc.
but rarely thought about them.
That changed on July 11, 2018. That morning, a writer going by
the name Rota Fortunae published an article on an investing
website, Seeking Alpha, alleging Farmland was at risk of
insolvency. Some investors had shorted the company, betting
Farmland's stock was poised to decline. It did, and by the end of
the day, Farmland was down 39%. It took more than two years for the
share price to recover.
Italian Right Is On Course to Win Elections
ROME-Italians elected a right-wing coalition to lead the
country, according to projected results, choosing an untested
leader who will confront Europe's gathering economic downturn and
energy crisis resulting from Russia's invasion of Ukraine.
Giorgia Meloni is favored to become Italy's new prime minister
after her Brothers of Italy party won the biggest share of the vote
in Sunday's parliamentary elections, according to projections based
on counting nearly half of the votes for Italy's Senate. She would
require approval from junior partners in her coalition to assume
the role.
Iran's Hard-Line Government Faces Growing Unrest Over Women's
Rights
Antigovernment protests in Iran gathered strength Sunday with
new demonstrations in scores of cities and indications that unrest
was growing, posing one of the biggest challenges the country's
conservative Islamic rulers have faced in years.
A movement initially led by young people that focused on the
country's strict Islamic dress code for women appeared to be
broadening into a mass outpouring of pent-up dissatisfaction among
middle-class workers and even religious Iranians at the regime's
treatment of its own citizens.
U.S. Warns Russia of 'Catastrophic Consequences' of Using
Nuclear Weapons in Ukraine
WASHINGTON-National security adviser Jake Sullivan said the U.S.
has warned Russia that it would face "catastrophic consequences" if
it uses nuclear weapons in Ukraine.
"We have communicated directly privately to the Russians at very
high levels that there will be catastrophic consequences for Russia
if they use nuclear weapons in Ukraine," Mr. Sullivan said Sunday
on the ABC News show "This Week."
China Stresses Its Taiwan Stance at U.N.
NEW YORK-China's foreign minister promoted one issue above all
others in a flurry of diplomatic meetings at the United Nations
this week: Beijing's sovereignty over Taiwan.
Addressing the U.N. on Saturday on behalf of President Xi
Jinping, Chinese Foreign Minister Wang Yi described Taiwan as
China's sovereign territory since ancient times and vowed resolute
action to forestall separatist activity.
North Korea Fires Short-Range Ballistic Missile Off Its East
Coast
SEOUL-North Korea fired a short-range ballistic missile off its
east coast on Sunday, Seoul and Tokyo officials said, Pyongyang's
first such weapons test in nearly four months as provocations
slowed during the country's Covid-19 outbreak.
The missile was launched at 6:53 a.m. local time from the inland
North Pyongan province, located in the country's northwest, South
Korea's military said. Japan said at least one ballistic missile
had been fired, hitting an estimated altitude of 31 miles and
flying around 250 miles before splashing into the waters between
Korea and Japan.
DeSantis Re-Election Campaign Focuses on Voters in Florida
Republican Base
MIAMI-In closely divided Florida, gubernatorial candidates
usually tack toward the middle in the general election after
courting their party bases in the primary. Not Republican Gov. Ron
DeSantis.
Last week, he sent two planes of migrants to Martha's Vineyard,
infuriating immigrant-rights groups, triggering lawsuits and
garnering praise from some Republicans and conservative media
outlets. Mr. DeSantis recently campaigned for conservative GOP
candidates in Kansas and Pennsylvania while asserting that Florida
has "gotten redder." His speeches often focus on critical race
theory, school policies on gender issues and liberals, who he says
are "trying to render the conservative half of the country
second-class citizens."
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
Dye & Durham 4Q
Economic Indicators:
None scheduled
Other News:
Fiona Moves Away From Canada, Leaves Thousands Without Power
Former Hurricane Fiona left hundreds of thousands of Canadians
without electricity Sunday, as coastal communities grappled with
washed out roads, downed trees and power lines, and homes swept
into the sea.
After churning its way up the Atlantic last week, Fiona came
ashore in Atlantic Canada around 3 a.m. local time Saturday as a
powerful post-tropical cyclone.
Read more here.
Expected Major Events for Monday
00:30/JPN: Sep Japan Flash Manufacturing PMI
08:00/GER: Sep Ifo Business Climate Index
08:30/UK: Jun Card Spending statistics
12:30/US: Aug CFNAI Chicago Fed National Activity Index
14:30/US: Sep Texas Manufacturing Outlook Survey
23:50/JPN: Aug Services Producer Price Index
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Monday
Devolver Digital Inc (DEVO.LN) is expected to report for
Interim.
Dye & Durham Ltd (DND.T) is expected to report for 4Q.
Escalon Medical (ESMC) is expected to report for 4Q.
Friedman Industries (FRD) is expected to report for 1Q.
Sunlink Health (SSY) is expected to report for 4Q.
Vinco Ventures Inc (BBIG) is expected to report for 2Q.
iBio Inc (IBIO) is expected to report $-0.06 for 4Q.
Powered by Onclusive and Dow Jones.
ANALYST RATINGS ACTIONS
Ally Financial Inc Cut to Equal-Weight From Overweight by Wells
Fargo
Apollo Global Management Raised to Neutral From Underperform by
B of A Securities
Avista Raised to Buy From Neutral by Mizuho
Digital Realty Cut to Underweight From Equal-Weight by
Barclays
Domino's Pizza Raised to Outperform From Market Perform by BMO
Capital
Equinix Cut to Equal-Weight From Overweight by Barclays
Evercore Cut to Sell From Neutral by Evercore ISI Group
fuboTV Raised to Outperform From Neutral by Wedbush
Marathon Digital Cut to Neutral From Buy by BTIG
Moelis & Co. Cut to Sell From Neutral by UBS
Okta Cut to Neutral From Buy by Cleveland Research
Spero Therapeutics Raised to Outperform From In-Line by Evercore
ISI Group
Warrior Met Coal Raised to Buy From Neutral by B. Riley
Securities
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
September 26, 2022 05:35 ET (09:35 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
FTSE 100
Gráfica de índice
De Feb 2024 a Mar 2024
FTSE 100
Gráfica de índice
De Mar 2023 a Mar 2024