Stocks stutter, dollar firmer as spotlight turns to Fed chief -November 08, 2023 at 05:45 am EST

Stocks stutter, dollar firmer as spotlight turns to Fed chief -November 08, 2023 at 05:45 am EST
Stocks stutter, dollar firmer as spotlight turns to Fed chief -November 08, 2023 at 05:45 am EST

*Graphic: World FX rates

* Graphic: Global asset performance

LONDON, Nov 8 (Reuters) – World stocks markets stuttered on Wednesday, while the dollar continued to its rebound as traders waited to see if US Federal Reserve chief Jerome Powell will push back against rate-cut talk when he speaks later in the day.

Oil prices were struggling and fell to fresh three-month lows on concerns about declining demand from top oil consumers, the United States and China.

Financial markets reckon that the Fed has now finished with its most aggressive monetary tightening cycle in decades, and investors have ramped up bets for rate cuts next year since Friday’s key jobs data showed some signs of slowing.

Powell speaks on Wednesday and Thursday.

Fed Governor Christopher Waller said on Tuesday that the economy bears watching after “blowout” third-quarter GDP figures, while fellow governor Michelle Bowman said she still expected higher rates would be needed.

“I don’t think the Fed will be any tighter than it is right now but it won’t be quick to cut rates either,” said Tim Graf, head of macro strategy for Europe at State Street Global Markets.

MSCI’s world stock index was down roughly a fifth of a percent, having last week posted its biggest weekly jump in almost a year.

Europe’s broad STOXX 600 index was 0.2% weaker and US stock futures edged down in a sign that Wall Street was likely to open lower.

MSCI’s broadest index of Asia-Pacific shares slipped 0.3% and Japan’s Nikkei 225 closed lower after Bank of Japan Governor Kazuo Ueda told parliament the central bank did not need to wait until real wages turn positive before exiting stimulus.

Hong Kong’s Hang Seng fell and an index of mainland Chinese blue chips lost 0.24%.

Chinese authorities have asked Ping An Insurance Group to take a controlling stake in embattled Country Garden, the country’s biggest private property developer, four people familiar with the plan said.

In Europe, utilities stocks led sectoral declines, falling 1.2% to a one-week low, with the region’s largest energy networks operator, , losing 1.8% on expectations of a severe hit to fourth-quarter profit at its retail division.

Insurance stocks lost 0.7%, dragged by a 6.2% decline in Swiss Life Holding AG after the insurer’s full-year outlook on real estate worried markets.

“It’s been a bit of a roller coaster these last few weeks and, particularly this earnings season,” said Georgina Cooper, portfolio manager global equities, at Newton Investment Management in London.

She said markets were reacting so much to single news events because companies were struggling to provide earnings guidance due to the uncertainty around the post-COVID-19 economic outlook and macro factors such as moves in oil prices and the lack of visibility on the pace of China’s recovery.


Brent crude fell to a three-month low near $81 a barrel and was last down 0.6%, while US crude futures tumbled 0.8% to touch a low around $76.51

In London trade, US Treasury yields edged higher ahead of Powell’s speech.

Two-year yields were last up 3 basis points at 4.91%.

The dollar index, which measures the US currency against six major peers, was almost 0.3% firmer at 105.83, pulling away from the more than six-week low of 104.84 reached on Monday.

Still, it was well back from the high at the beginning of this month at 107.11.

The majority of FX strategists in a Reuters poll expect dollar weakness to linger for the rest of the year, amid a building consensus that the Fed’s tightening cycle is over, also signaling a peak in US yields.

“If the US is heading for slower growth but the ECB (European Central Bank) and BoE (Bank of England) cut rates first, that doesn’t undermine the dollar,” said State Street’s Graf.

(Reporting by Dhara Ranasinghe; additional reporting by Alun John in London and Kevin Buckland in Tokyo; editing by Robert Birsel)

The article is in Dutch

Tags: Stocks stutter dollar firmer spotlight turns Fed chief November EST


PREV Dolphins’ Achane, Armstead, Hunt set to play Sunday vs. Commanders
NEXT Gunay Uslu becomes CEO of Corendon, resigns as State Secretary for Media