The markets operate sideways on Thursday morning (8) as investors await the speech of Jerome Powell, chairman of the Federal Reserve (Fed, sort of central bank of the USA), as well as interest rate announcement in the euro zone by the European Central Bank (ECB).
Yesterday, the US Beige Book highlighted that the outlook for future economic growth in the country is weak. The agents consulted in the survey expect “slowing demand” in the next six to 12 months.
The document also carries that home sales fell in all 12 Fed districts, and that home construction is penalized by bottlenecks in the production chain.
The expectation is that the residential real estate market will also weaken, especially the demand for offices.
Already this morning, investors will have the latest view of the US economy with data on unemployment claims. Economists polled by Dow Jones expect 235,000 initial claims for unemployment insurance, up slightly from 232,000 the previous week.
Goldman Sachs, meanwhile, revised its forecasts for next year’s Fed rate decisions.
Analysts led by chief economist Jan Hatzius said in a note that the firm expects a 75 basis point increase in September, up from the previous forecast of 50 basis points, as well as a 50 basis point increase in November, also revised from a previous projection of 25 basis points.
They also expect a 25 basis point increase in December – citing recent comments from officials.
On the political side, the Washington Post reported that amid the top-secret documents seized from former President Donald Trump’s home, the FBI found materials describing a foreign government’s military defenses, including its nuclear capabilities.
According to the newspaper, the discoveries are part of the operation that took place last month and recovered empty folders marked as containing classified information at his mansion in Mar-a-Lago.
In Europe, the UK’s new Prime Minister Liz Truss is expected to announce today a package worth tens of billions of pounds to help people pay their energy bills, but there are concerns about how it will be funded.
This announcement is expected to freeze the price of energy at its current level or £2,500 ($2,870). Currently, the cap that takes effect next month will increase the average energy bill from £1,971 to £3,549 per year.
In Asia, another U.S. congressional delegation is visiting Taiwan, and tensions remain high with China over its claims to the self-governing island.
The eight-member bipartisan delegation is scheduled to meet with Taiwanese President Tsai Ing-wen today.
At 6:54 a.m. the Dow Jones was down 0.02 percent, the S&P 500 was down 0.04 percent, and the Nasdaq was down 0.00 percent.
In Europe, Germany’s DAX was up 0.09%, London’s FTSE 100 was up 0.39%, and France’s CAC 40 was up 0.20%. Italy’s FTSE MIB was down 0.13%, and the Stoxx600 rose 0.19%.
In Asia, Japan’s Nikkei closed up 2.31%, Shanghai closed down 0.33%, and Hong Kong’s HSI closed down 1.00%. South Korea’s Kospi closed up 0.33%, and Australia’s ASX 200 closed up 1.77%.
On the commodities side, Brent crude fell 0.42%, quoted at US$87.63, and WTI crude fell 0.87%, quoted at US$81.23. Gold was up 0.13%, quoted at US$ 1,730.00, and ore was up 3.14%, quoted at US$ 101.47.
USA
According to CNBC, the stock market is coming off a solid rally during normal trading hours yesterday. The Dow gained about 436 points, or 1.4%. The S&P 500 rose 1.8% and the Nasdaq Composite rose 2.1%.
It was the best day since August 10 for all three averages, and the Nasdaq broke a seven-day losing streak.
Even with yesterday’s rally, stocks remain in a downtrend overall. Worries about a slowing economy and further Fed rate hikes are driving some investors away from riskier parts of the market.
Europe
In Europe, investors await the ECB’s decision on its latest monetary policy moves. The information is from CNBC.
The ECB expects to anticipate a series of interest rate hikes to fight inflation, with analysts saying a “jumbo” 75 basis point increase is a possibility.
With inflation in the euro zone projected to rise to at least 10 percent in the coming months and the risk of consumer prices skyrocketing, a jumbo rate increase of 75 basis points on Thursday is a possibility.
The European economy is the “number one” candidate in the world likely to experience a recession, says Pictet
Wealth Management, ahead of an expected European Central Bank rate hike.
Asia
In Asia, Australia posted a record drop in its trade surplus, mainly due to falling exports of iron ore and coal.
Exports in July fell 10% from the previous month, while imports increased 5%, resulting in a shrinking trade surplus of $8.7 billion in July, down from $17.1 billion the previous month.
Japan’s economy grew 3.5% annualized in the second quarter, beating estimates in a Reuters poll that forecast growth of 2.9%. The economy grew 0.9% quarter-on-quarter, official data showed.
On the corporate side, China’s Huawei unveiled the Mate 50 smartphone, its latest attempt to remain relevant in the mobile market even though it has lost a lot of ground due to US sanctions.
Huawei claims this is the first smartphone released to the public that can connect to China’s Beidou satellite network, a rival to the US state-owned Global Positioning System (GPS) that was completed in 2020.
Brazil
In Brazil, while attention in Brasilia is focused on the political acts surrounding the September 7 celebrations, the head of the Executive Branch took the opportunity to issue a decree that paves the way to unblock before the elections R$ 5.6 billion in amendments that support the secret budget. The information is from Estadão.
According to the newspaper, the budget maneuver makes innocuous, in practice, the negotiations underway by Senate President Rodrigo Pacheco around two Provisional Measures (MPs) that postpone to 2023 the payment of expenses linked to the areas of culture, science and technology approved by Congress. As the MPs have the effect of law, the government can already use the space opened by them to release the rapporteur’s amendments based on the decree.
The Folha de S.Paulo highlights that the fall in fuel prices has helped consumer inflation in Brazil to approach the average of the largest developed and emerging economies, something that has not occurred for two years, according to a survey by the UBS BB bank.
The country still suffers, however, strong pressure from industrial goods prices, and services inflation has also re-emerged as a concern factor, after two years running below the average of 13 economies analyzed by the financial institution. Among them, the USA, the Euro Zone, Mexico, India, Russia and Chile.
O Globo, in turn, informs that the soap opera of the auction of Anglo American debentures belonging to the bankrupt estate of MMX, of Eike Batista, gained another chapter – which is far from being the last.
After three unsuccessful attempts to sell the last valuable asset of the former billionaire, a new auction is in the works, with a minimum price of R$ 360 million. In August, in the previous attempt to sell the debentures, the starting bid was US$ 360 million. And who should take the papers is BTG Pactual.
Ibovespa
The Ibovespa was closed yesterday because of the September 7th holiday in Brazil.
In NY the Dow Jones fell 0.55%, the S&P 500 fell 0.41% and the Nasdaq fell 0.74%.
New York markets
Dow Jones: -0.02%
S&P: -0.04%
Nasdaq: 0.00%
European Markets
DAX, Germany: +0.09%
FTSE, United Kingdom: +0.39%
CAC, France: +0.20%
FTSE MIB, Italy: -0.13%
Stoxx 600: +0.19%
Asia Markets
Nikkei, Japan: +2.31%.
Shanghai, China: -0.33%
HSI, Hong Kong: -1.00%
ASX 200, Australia: +1.77%
Kospi, Korea: +0.33%
Oil
Brent (December 2021): US$87.63 (-0.42%)
WTI (November 2021): US$ 81.23 (-0.87%)
Gold
Gold futures (December 2021): US$ 1,730.00 (+0.13%)
Iron ore
Dalian Exchange: us$ 101.47 (+3.14%)
Iron ore
Dalian Exchange: US$ 101.47 (+3.14%)