Economy

Marketmind: Sinking feeling By Stocksak


© Stocksak. FILE PHOTO – Elon Muss attends the opening ceremony at the new Tesla Gigafactory, which produces electric cars, in Gruenheide Germany, on March 22, 2022. Patrick Pleul/Pool via REUTERS

Anshuman Daga presents a look at tomorrow’s European and global markets.

Tesla (NASDAQ)’s Elon Musk arrived at Twitter’s HQ Wednesday morning carrying a sink. He was just hours away from the deadline for completing his $44 billion purchase.

However, financial markets might be wise to be cautious about the extent of the spillover from a small 50 basis point hike at Bank of Canada.

The Fed is still the pacesetter in world rates and the transmission of rates to the real economy from the United States is more complicated than it is for Canada or Australia. Markets are still priced for a Fed hike of 75 basis points next week.

The European Central Bank is almost certain to announce its second supersized 75-basis-point rate increase. This is a hint that the job isn’t yet done, though the size of any subsequent moves is uncertain.

The ECB was late to the global rate hike party. Despite rising recession risk, the euro area inflation has risen to nearly 10% versus its 2% target.

The ECB decision is expected at 1215 GMT, followed by a news conference starting at 1245 GMT.

However, markets are optimistic that the Fed and other central bank may slow down the pace of rate increases.

Hopes and hopeful dip investors in Hong Kong pushed Asia’s benchmark ex-Japan stocks gauge 1.3% higher. The mighty dollar is making a rare retreat.

Despite disappointing earnings reports in the United States, markets saw broad-based gains despite stocks closing lower.

After-hours trading saw Facebook shares (NASDAQ:) parent Meta Platforms Inc plummet nearly 20%. The company had forecasted a weak holiday quarter, and significant increases in costs next year.

Thursday’s preliminary estimate of the third quarter U.S. GDP will set the tone for future Fed interest rate hikes.

European stock investors will be focusing on Credit Suisse Group’s major strategic restructuring, which will be unveiled on Thursday following the bank’s string losses and failures in risk management.

Credit Suisse moves off the piste

Key developments that could impact markets on Thursday

(ECB rate decision and meeting https://graphics.reuters.com/CREDITSUISSEGP-REVAMP/lbpggrokepq/chart.png)

(ECB set for another supersized rate hike https://graphics.reuters.com/GLOBAL-MARKETS/myvmomnnovr/chart.png)

European economic data: Germany GfK Nov consumer mood, Germany Oct CPI.

U.S. economic data: Sept durable goods, Advance GDP (Q3)

Earnings from the United States: Apple (NASDAQ), Amazon (NASDAQ), Intel (NASDAQ) & Mastercard (NYSE)

European earnings: Credit Suisse and Unilever (NYSE), STMicroelectronics, Shell (LON)

News Source and Credit

Stocksak Editorial

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