Moving markets today: U.S. stocks rise, oil prices plummet to 3-month lows, all eyes on Powell and Bailey’s speeches
U.S. stocks climbed, with the S&P 500 and Nasdaq posting their longest winning streak in two years. Oil prices fell to a three-month low, and PBOC governor Pan Gongsheng is optimistic about China’s 5% annual growth target. The focus will be on Fed Chair Jerome Powell’s and BOE Governor Andrew Bailey’s speeches.
The FTSE 100 finished down 0.1 per cent yesterday.
Oil prices plummet to 3-month lows
Oil prices hit a more than three-month low on Wednesday, with a sharp increase in U.S. crude supplies and mixed Chinese economic data raising concerns about global crude demand. Brent crude futures fell 25 cents to $81.36 a barrel, and U.S. crude futures dropped 35 cents to $77.02 a barrel, both reaching their lowest levels since July 24 in early Asian trading.
China’s central bank foresees smooth sailing to 5% growth target; BOJ Ueda signals chance of exit
People’s Bank of China governor, Pan Gongsheng, expects China to smoothly achieve its 5% annual growth target and said China will guard against overshooting risks of the yuan exchange rate. The International Monetary Fund (IMF) has also raised its GDP growth forecasts to 5.4% in 2023 and 4.6% in 2024.
Bank of Japan Governor Kazuo Ueda said the central bank doesn’t need to wait for positive inflation-adjusted wage growth to end ultra-loose monetary policy.
Fed officials split on central bank’s next move
Christopher Waller said the economy requires close attention after “blowout” third-quarter GDP figures, while fellow Michelle Bowman expressed her continued expectation of the need for higher rates. Austan Goolsbee acknowledged progress in curbing inflation, but Neel Kashkari suggested that the Fed might need to take additional measures to achieve its 2% inflation goal.
Investors are now looking forward to comments from Fed Chair Jerome Powell, scheduled to speak on Wednesday and Thursday, while traders will closely watch a speech by BOE Governor Andrew Bailey on Wednesday.
Read more: FTSE 100 flat after Huw Pill speech but bond yields fall
IMF urges ECB to keep rates at 4%; UK job market remains lacklustre
Alfred Kammer, IMF’s European Department Head, advised the ECB to keep its deposit rate at 4% throughout next year to address euro zone inflation, driven by fast wage growth.
British employers reduced hiring at a slower pace in October, but wage growth decelerated and more people started seeking jobs, as per the KPMG/REC survey.
S&P 500 and Nasdaq mark their longest winning run in 2 years
Dow Jones up 0.17% to 34,152.8; S&P 500 gains 0.28% at 4,378.38; Nasdaq up 0.90% to 13,639.86. The energy sector was the weakest performer, falling 2.2% due to a more than 4% drop in crude prices driven by demand concerns and a stronger dollar. Uber climbs 3.7% with strong Q4 forecast; Datadog soars 28% on boosted annual outlook.
The U.S. 10-year Treasury yields remained relatively stable at 4.5789%, and the dollar index showed minimal movement at 105.55. MSCI’s most comprehensive index for Asia-Pacific shares, excluding Japan, increased by 0.3%. Gold remained unchanged at $1,968, and bitcoin stayed around the $35,200 mark.