Moving markets: Five things shaping the FTSE 100 today
Moving markets and the FTSE 100 today: Wall St gains, RBA hikes, China exports plunge and WeWork files bankruptcy
U.S. stocks closed slightly higher as investors awaited guidance from the Federal Reserve officials later in the week. However, Asian stocks broke a three-day winning streak. The Royal Bank of Australia aised rates as expected to combat inflation. China’s exports declined, and WeWork filed for Chapter 11 bankruptcy. Here are five crucial updates to kickstart your day.
RBA raises rates to 12-year high
The Reserve Bank of Australia (RBA) increased interest rates by 25 basis points to 4.35%, as widely expected, concluding a four-month period of unchanged policy. They also indicated a willingness to tighten further if necessary to curb inflation. Subsequently, the Australian dollar fell 0.72% to 0.64 against the greenback.
China’s exports plunge 6.4%; PBOC remains calm on economy
China’s October exports dropped by 6.4% year-on-year, while imports unexpectedly rose by 3.0%. This mixed data underscores the uneven nature of the recovery in the world’s economic behemoth. However, People’s Bank of China Deputy Governor Zhang Qingsong said he was “not too much worried” about his country’s economy despite the challenges posed by sluggish consumer demand and a property sector debt crisis.
Close, but no cigar
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stressed the need for additional measures to address inflation, saying, “We haven’t completely solved the inflation problem. We still have more work ahead of us.” ECB policymaker Robert Holzmann also highlighted vigilance regarding inflation and the potential for future interest rate increases, ruling out rate cuts in the near term. The Bank of England’s Huw Pill said similar.
Read more; FTSE 100 makes muted start to the week
WeWork Chapter 11, Meta AI restrictions
WeWork, co-founded by Adam Neumann and backed by SoftBank, has filed for Chapter 11 bankruptcy, listing assets and liabilities between $10 billion to $50 billion. Eyes will be on FTSE 100 property giants with exposure to one of London’s biggest tenants.
Meta, the company that owns Facebook, is limiting the use of its new generative AI advertising tools for political campaigns and regulated advertisers due to concerns about their potential to spread election misinformation.
Wall Street extends winning streak; Asia’s streak snapped
The Dow Jones rose 34.54 points (0.10%) to 34,095.86, the S&P 500 gained 7.64 points (0.18%) at 4,365.98, and the Nasdaq Composite increased by 40.50 points (0.30%) to 13,518.78. However, Asian stocks experienced a setback on Tuesday, with Japan’s Nikkei declining by 1.20% after a three-day winning streak, and the Shanghai Composite fell 0.4%. Treasury yields remained relatively stable, retracing some of the gains from the previous week on Monday.
Ten-year yields held at 4.92%, roughly 10 basis points higher than Friday’s closing. The euro held at $1.0710 and the U.S. dollar index remained steady at 105.36. Brent crude futures fell 49 cents, or 0.58%, to $84.69 a barrel while U.S. West Texas Intermediate crude was at $80.4 a barrel, down 42 cents, or 0.52%. Gold was down slightly at $1,972, and bitcoin hovered around $34,900.
The FTSE 100 finished almost dead flat yesterday.