- Barry Adams
- 25 Nov, 2022
- New York City
Stocks on Wall Street lacked direction and closed mixed in shortened trading session.
Benchmark indexes generally closed down in thin trading a day after Thanksgiving holiday and investors reacted to the latest news from China.
The People's Bank of China lowered its bank reserve ratio by 25 basis points to a weighted average ratio of 7.8%, freeing as much as $70 billion in capital.
Investors grew worried after the resurgence of Covid19 virus forced more regions to lockdown conditions impacting about 20% economic activities, from 10% just a week ago.
The S&P 500 index decreased 1.14 points to 4,026.12 and the Nasdaq Composite index eased 0.5% or 58.96 points to 11,226.36.
For the week, the S&P 500 index gained 1.5% and the Nasdaq Composite increased 0.7%.
Crude oil price declined $1.70 to $76.38 a barrel and natural gas prices eased 38 cents to $6.79 a thermal unit.
The yield on 2-year Treasury noted closed at 4.47%, 10-year Treasury notes at 3.69% and 30-year Treasury bonds at 3.79%.
Investors also reviewed the latest minutes from the European Central Bank' rate setting meeting held on October 27.
The hawkish tone of the committee members suggested that interest rates are likely to go higher by at least 50 basis points at the next meeting scheduled November 30.
The dollar edged lower after the release of minutes and extended decline against the British pound and the euro for the fourth day in a row.
Stock Movers
Apple Inc declined 2% to $48.11 after the protest broke out at Foxconn's factories in China after months of lockdowns, a key contract-manufacturer of iPhone devices.
Activision Blizzard declined 4.1% to $73.47 after Politico reported that the Federal Trade Commission is likely to sue Microsoft and block its $69 billion acquisition of the company.
Coupa Software soared 6.4% to $62.69 following a 29% surge in the previous session on the Bloomberg News report that Vista Equity Partners is looking to acquire the company.
Grindr Inc declined 4.5% to $9.55 and extended weeklong losses from the high of $63.71 on November 18.
The, recently merged with a special purposed acquisition company Tiga Acquisition Corp., generated a profit of $5.1 million on $146 million in revenue, compared to a $13 million loss on $104 million in sales.
Tesla declined 0.2% to $182.86 after the electric vehicle maker recalled 80,000 vehicles in China to fix seat-belt and software issues.
- Bridgette Randall
- 25 Nov, 2022
- Frankfurt
Benchmark indexes in Europe closed mixed a day after the release of the latest minutes of the European Central Bank meeting struck a hawkish tone.
ECB Minutes Show Hawkish Tone, Actions Lag Rates Considerably
With inflation near a 4-decade high and showing no signs of abating, wholesale prices in the euro zone hovering above 40% and consumer price inflation close to 10%, more policymakers supported larger rate hikes.
Policy committee also noted the weakening economic backdrop but said labor markets are strong enough to withstand rapidly slowing economic activities.
"Members widely agreed that the outlook for euro area economic activity had deteriorated since the September monetary policy meeting. It was noted that all components of demand, including consumption, investment and exports, showed signs of weakening." the statement noted.
The euro extended gains for the fourth day after the release of the minutes of meeting and comments from the ECB officials.
"The incoming data so far suggest that the room for slowing down the pace of rate adjustments remains limited," said Isabel Schnabel on Friday.
After the last meeting of the ECB's Governing Council, rates were revised higher by 75 basis points to 2.0%, the highest since 2009 and markets are anticipating to go higher at its next meeting on November 30th by at least 50 basis points.
Markets also reacted to rising lockdown conditions covering regions generating about 20% of economic activities in China.
German Economic Growth Revised Higher, Confidence Index Marginally improves
Germany revised its third quarter economic growth estimate higher, a report from the Destatis showed Friday.
In the third quarter, the German economy expanded at a faster pace of 0.4%, higher than 0.3% estimated on October 28.
The economy expanded at a faster pace despite the rising inflation, supply bottlenecks and slowing global demand.
In addition, the forward looking consumer confidence index reported by GfK is expected to show an improvement.
The December index rose to -40.2 from -41.9 in November, despite the marginal improvement the index is deep in the negative territory.
China Lowers CRR for Banks
The People's Bank of China lowered its cash reserve ratio by 25 basis points to a weighted average ratio to 7.8%, freeing up capital of $70 billion for more commercial lending.
EU Diplomats Delay Russian Oil Cap Decision
European diplomats also delayed by a week its controversial decision to impose a price cap on Russia oil between $65 and $70 a barrel.
The cap sets Russia's crude price at a much higher level than the production cost and the limit is not expected to have a significant impact on Russia's ability in selling its energy products.
Weekly Advance In Stock Indexes
The DAX index increased 1.82 points to 14,541.38, the CAC-40 index increased 5.16 to 6,712.48 and the FTSE 100 index added 0.3% to 7,486.67.
For the week, the DAX index increased 0.7%, the CAC-40 index added 1.1% and the FTSE 100 index advanced 1.3%.
Brent crude oil declined 1.6% to $83.98 a barrel and Dutch TTF natural prices for the next month delivery rose 1.06% to 125.10 euros a MWh.
The yield on 10-year German government bonds inched up to 1.96%, French bonds to 2.42%, the UK Gilts to 3.11% and Italian bonds to 3.84%.
The euro extended gains for the fourth day in a row to close at $1.04 and the British pound increased to $1.20.
Europe Stock Movers
Devro Plc soared 60% to 307 pence after the Scotland-based sausage casing maker agreed to be acquired by Germany-based Saria for 540 million pounds.
About two-thirds of 2,200 company staff are based in the eurozone.
SSE PLC increased 1% to 1,734.0 pence after the electric utility company agreed to sell about 25% stake in its power grid to Ontario Teachers' Pension Plan Board.
LSL Property Services plc dropped 10.6% to 234.30 pence after the residential-property services company said 2022 results are likely to fall short of previous expectations.