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Stocks Fall as Growth Concerns Offset Coronavirus Turnaround in China By Reuters

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© Reuters. FILE PHOTO: A view of a giant display of stock indexes in the wake of the coronavirus disease (COVID-19) outbreak in Shanghai, China, October 24, 2022. REUTERS/Ally Song/FilePhoto

Written by Danilo Masoni

MILAN (Reuters) – Global stocks fell on Wednesday and bonds remained supported after a chorus of Wall Street bankers warned of a possible recession ahead, tempering optimism about China’s dramatic shift in its tough coronavirus policy.

Top executives at Goldman Sachs (NYSE: NYSE: ), JP Morgan and Bank of America (NYSE: NYSE) sounded dovish in their comments on Tuesday about the economic outlook, hurting risk appetite globally and triggering a fresh recessionary signal from bond markets. .

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“Yields have highlighted the downward trend, which is rather new,” said Giuseppe Sircel. “In the earlier stages of risk aversion, bonds tended to fall along with stocks, precisely because the risk-off mood was driven by concerns about inflation and politics.” cash.” , fund manager at Anthilia in Milan.

“Now, it appears that concerns about economic growth have overtaken those about inflation,” he added.

A gloomy economic outlook initially drove safe-haven demand for the US dollar and long-term bonds, but those moves were partially reversed in the early afternoon in Europe. Oil has been volatile after hitting new lows in 2022 and gold prices have soared.

“Economic growth is slowing,” said David Solomon, CEO of Goldman Sachs. “When I talk to our customers, they sound very careful.”

Weaker European stock markets put the regional index on course for a fourth straight session of losses, down 0.7% by 1313 GMT. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.5%.

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This sent the MSCI World Shares Index down 0.3%. The index fell 0.6 percent after Tuesday’s losses, and the volatility index rose to its highest level since November 21.

China’s National Health Authority said on Wednesday that asymptomatic COVID-19 cases and those with mild symptoms can self-treat while they are in home quarantine.

While some of the changes announced echoed similar easing steps other countries took several months ago, the announcement was the strongest signal yet that China is preparing its people to live with the disease after nearly three years of crippling restrictions that have hurt the economy.

However, the market reacted negatively as the focus shifted to how well China could implement its policy shift, especially if new cases increased during the winter. Analysts say the road to fully reopening the economy will be long and not without risks.

The index fell 0.4 percent, Hong Kong fell 3.2 percent, and the yuan rose 0.3 percent to 6.9768 per dollar.

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“This ‘refinement’ of the zero Covid strategy can be seen as a very cautious and gradual approach towards a new way of dealing with the virus,” said Stefan Koopmann, chief strategist at Rabobank in Amsterdam.

He added: “Having said that, we still expect Covid to continue to force cities into intermittent lockdowns at least until the next plenary session of Parliament in March and possibly for the whole of 2023.”

In addition to the bleak demand outlook globally, China earlier in the day reported bleak trade data for November, with both imports and exports suffering their biggest monthly declines since 2020 – heavily foreshadowing prospects for recovery.

India on Wednesday was the latest central bank to begin slowing the pace of interest rate increases, with it raising the key lending rate by 35 basis points to 6.25%, less than three 50 basis point hikes it made previously. Canada is the next taxi in the ranking with a rate decision expected at 1500 GMT.

The yield on the benchmark 10-year US Treasury note added 2.5 basis points to 3.5404%, after falling 8.6 basis points on Tuesday. The yield on two-year Treasury notes shrank to 80 basis points after falling to record lows on Tuesday, in a move seen to point to a recession ahead.

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In commodities, oil rose after earlier falling near 2022 lows, as hopes of higher Chinese demand offset worries about a recession. Brent crude rose 0.7 percent to 79.89 a barrel, after falling below $80 for the second time in 2022 during the previous trading session.

In the foreign exchange markets, the US dollar reversed its initial gains, as traders weighed the uncertain economic outlook. The dollar remains more than 8% below year-highs, weighed on expectations about a slowdown in US interest rate hikes.

The index fell 0.35% to 105.18 after hitting a one-week high earlier in the session close to a one-week high, heading closer to the June 2022 low of 104.10 hit on Monday.

The euro rose in the latest trading 0.5 percent to $ 1.0525 in Europe on Wednesday, and the pound sterling also rose against the dollar, by 0.4 percent, to $ 1.218, after falling 0.4 percent overnight.

The Canadian dollar held steady at 1.365 per dollar ahead of an expected rate hike from the Bank of Canada later on Wednesday.

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It rose 0.4% to $1,778 an ounce and bitcoin fell 1.3% below the $17,000 mark as cryptocurrency sentiment frayed as the fallout from the FTX collapse ripples across the sector.

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MicroStrategy is at its lowest level since 2020 after the sales were revealed

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(Bloomberg) — Shares of MicroStrategy touched their lowest level since August 2020 after the enterprise software company, which in recent years has been known as the largest buyer of bitcoin, revealed its first sale of the token.

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The stock fell 1.1 percent to $136.63 on Thursday, down 75 percent this year. Bitcoin rose less than 1% to around $16,590 and is believed to have fallen 64% since the start of the year.

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In a filing on Wednesday, MicroStrategy said it acquired approximately 2,395 Bitcoin between the beginning of November and December 21 through its subsidiary MacroStrategy, and paid out approximately $42.8 million in cash. It then sold 704 of the tokens on Dec. 22 for a total of about $11.8 million, citing tax purposes, before buying another 810 of them two days later.

Matt Malley, chief market strategist for Miller Tabak + Co. Step down as CEO. This news means they don’t seem to want to do that anytime soon.”

Overall, MicroStrategy held about 132,500 bitcoins worth over $4 billion USD as of December 27th. The company paid an average purchase price of $30,397 per bitcoin.

“Given MicroStrategy’s $2.4 billion in leverage, we believe the company may have a lot of leverage over Bitcoin, and may face some liquidity risk,” Jefferies analyst Brent Thiel wrote in a note on Wednesday. Thill has an “underperform” rating on the stock and a price target of $110.

Over the years of the pandemic, MicroStrategy has become well known for its Bitcoin takeovers, largely led by Saylor. Earlier this year, Saylor stepped down from that role and now serves as CEO at the company and continues to lead its bitcoin strategy.

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MicroStrategy was trading around $120 before Saylor first announced the company’s Bitcoin purchases in 2020. The stock reached an all-time high of $1,315 in February 2021.

(Updates to include the stock’s closing price in the second paragraph.)

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Bankman-Fried May File Petition in New York Federal Court Next Week Before Judge Louis Kaplan By Cointelegraph

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Former FTX CEO Sam Bankman-Fried is set to appear in court on the afternoon of January 3 to enter a lawsuit over two counts of wire fraud and six counts of conspiracy against him related to the collapse of cryptocurrency exchange FTX, according to Reuters. mentioned on December 28, citing court records. Bankman-Fried will appear before District Judge Lewis Kaplan in Manhattan.

Judge Kaplan was appointed to hear the case on December 27 after the original judge in the case, Ronnie Abrams, Resigned herself because of connections between FTX and the law firm Davis Polk & Wardwell, where her husband is a partner. The company provided advisory services to FTX in 2021.