The markets operate on Thursday morning (29) with investors awaiting data regarding the GDP in the U.S. as well as inflation in Germany. The reports are due to be released in the next few hours today.
With this outlook, Wall Street futures were in negative territory in the early hours of the day, and so were the stock markets in Europe. Yesterday, the trend was down at the close, but a move by the Bank of England (BoE) made the stock markets reverse the sign.
It turns out that the institution said it would buy bonds in an effort to help stabilize its financial markets and the British pound. Sterling has fallen to record lows against the US dollar in recent days.
This statement marked a sea change from the aggressive tightening campaign that many global central banks have undertaken to deal with rising inflation. Even the Ibovespa benefited and followed in New York’s wake.
The World Bank, meanwhile, stressed that developing countries face economic headwinds. The head of the institution warned yesterday that developing countries face an extremely challenging short-term outlook as the sharp slowdown in global growth increases the risks of a prolonged recession.
In addition, the return of inflation makes deficits more dangerous, reports the Wall Street Journal, listing that Britain’s proposed income tax cut shows that political leaders are still stuck in a pre-pandemic world of unlimited borrowing.
The Journal also brings in that Russia’s mobilization and falling oil prices weaken Putin’s economic hand. This is because a costly troop mobilization, plummeting energy prices and a new round of Western sanctions put the Kremlin’s economic policy in check.
Another factor linked to the Russia-Ukraine conflict that permeates much of the world’s newspapers concerns the results of a series of so-called referendums that have taken place in occupied parts of Ukraine – which predictably show a resounding majority vote to join Russia. This move sets the stage for Moscow to announce its annexation in the coming days.
For analysts, this could mark a dangerous point in the war for Ukraine, with the possibility of Russia resorting to unconventional weapons to “defend” what it will say is its territory and its citizens.
At 6:50 a.m. the Dow Jones was down 0.82 percent, the S&P 500 was down 0.92 percent, and the Nasdaq was down 1.07 percent.
In Europe, Germany’s DAX was down 1.62%, London’s FTSE 100 was down 1.82%, and France’s CAC 40 was down 1.48%. Italy’s FTSE MIB was down 1.70%, and the Stoxx600 was down 1.72%.
In Asia, Japan’s Nikkei closed up 0.95%, Shanghai closed down 0.13%, and Hong Kong’s HSI closed down 0.49%. South Korea’s Kospi closed up 0.08%, and Australia’s ASX 200 closed up 1.44%.
On the commodities side, Brent crude fell 1.53%, quoted at US$87.95, and WTI crude fell 1.22%, quoted at US$81.15. Gold, in turn, fell 1.06%, quoted at US$ 1,652.30, and ore was up 0.77%, quoted at US$ 100.39.
USA
According to CNBC, on a quarterly basis the Nasdaq is on track to break a two-quarter losing streak, while the Dow is heading for its third consecutive quarterly loss for the first time since the third quarter of 2015. The S&P is on track for its third negative quarter since the six-quarter negative sequence that ended the first quarter of 2009.
US Vice President Kamala Harris, meanwhile, arrived in South Korea today to strengthen Washington’s alliance with Seoul, a day after North Korea conducted a new ballistic missile test. Harris landed at Osan Air Base after a visit to Tokyo to attend the state funeral of former Japanese Prime Minister Shinzo Abe. She is expected to meet with President Yoon Suk-yeol later today.
Europe
In Europe, Porsche shares rose in their stock market debut today in what is being heralded as one of the largest ever public offerings in Europe.
Shares of the iconic sports car brand were initially trading at 84 euros ($81) this morning. This after they were quoted at the top of their range yesterday at 82.50 euros, valuing the company at around 75 billion euros.
Parent company Volkswagen, meanwhile, is offering 911 million shares, a reference to Porsche’s famous 911 model.
In the East, President Vladimir Putin’s government is denying passports to Russian citizens drafted into the war as reservists. There is an attempt to leave the country en masse, with congested roads. There are also demonstrations against the draft.
Asia
In Asia, the People’s Bank of China has warned against betting on the yuan in either direction following its rapid decline against the US dollar this week.
“Do not bet on a unilateral appreciation or depreciation of the renminbi exchange rate,” the central bank said in a Chinese statement on its website yesterday.
South Korean authorities, meanwhile, have asked two cryptocurrency exchanges to freeze more than $60 million in bitcoins linked to Do Kwon, the founder of the company behind two now collapsed digital currencies.
The Seoul Southern District prosecutor’s office said it has made a request to cryptocurrency exchanges OKX and KuCoin to freeze some 3,313 bitcoins linked to Kwon. At yesterday’s price, that bitcoin is worth about $62 million.
Kwon is the founder of Terraform Labs, the company behind the algorithmic stablecoin terraUSD or UST and its sister token luna.
Brazil
In Brazil, after almost three months of delays in relation to the original schedule, the government officially filed the project of privatization of the Port of Santos with the Federal Court of Accounts (TCU). The information is from Estadão.
According to the newspaper, the successive postponements for the final delivery of the proposal mean that the issue reaches the Court with few prospects. Although the government insists in foreseeing the auction this year, sources that observe the process already recognize this scenario as, at least, unlikely.
Besides the delays and the inherent complexity of the case, the project was presented to the court with another complicating factor: the lack of definition about what will be done with the area that the Ministry of Infrastructure plans to transform into a super terminal for container handling in Santos.
Folha de S.Paulo highlights that the country’s fiscal situation worsened between August and September for 46% of the economists consulted in the questionnaire sent by the Central Bank to the financial market on the eve of the last Copom (Monetary Policy Committee) meeting.
The percentage is almost half of that observed in the two previous meetings of the collegiate of the Central Bank – between June and August, 93% said they saw a deterioration in the scenario.
O Globo, in turn, reports that a decree published yesterday by the Ministry of Mines and Energy will allow all consumers of high voltage in the country to choose from whom they want to buy energy. The measure, which will be effective from January 2024, reaches approximately 106 thousand new consumer units, mainly in commerce and industry, benefiting small and medium companies.
This new group of consumers will be able to buy energy in the free market, in which it is possible to sign a contract directly with generators, as an option to the regulated market that operates via distributors. Today, the free market already accounts for 38% of the country’s energy consumption, reaching more than 30,000 consumption units.
Ibovespa
The Ibovespa ended yesterday’s session up 0.07%, at 108,451 points. Throughout the day the index varied between 107,914 and 108,970 points. The financial volume was R$26.2 billion.
New York Markets
Dow Jones: -0,82%
S&P: -0.92
Nasdaq: -1,07%
European Markets
DAX, Germany: -1.62%
FTSE, United Kingdom: -1.82%
CAC, France: -1.48%
FTSE MIB, Italy: -1.70%
Stoxx 600: -1.72
Asia Markets
Nikkei, Japan: +0.95%
Shanghai, China: -0.13%
HSI, Hong Kong: -0.49%
ASX 200, Australia: +1.44%
Kospi, Korea: +0.08%
Oil
Brent (December 2021): US$87.95 (-1.53%)
WTI (November 2021): US$ 81.15 (-1.22%)
Gold
Gold futures (December 2021): US$ 1,652.30 (-1.06%)
Iron ore
Dalian Exchange: us$ 100.39 (+0.77%)