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Global Markets Cautious Ahead of US Inflation



(Paris) The wait-and-see attitude dominated the markets on Wednesday, before the final results of the midterm elections in the United States and the publication on Thursday of the American inflation figures for October.

In Europe, stock markets ended flat. Paris lost 0.17%, Frankfurt 0.16% and London 0.14%. On the other hand, Milan (+0.36%) and other places on the Old Continent progressed.

Wall Street evolved in the red since the opening. Around 11:55 a.m., the Dow Jones was down 0.83%, the S&P 500 0.79% and the NASDAQ 1.07%.

The counting of the ballots for the midterm elections in the United States had not been completed, but the House of Representatives seemed won over to the Republicans, while the composition of the Senate was still uncertain.

“The scenario in which the Democrats would be in the minority in the House of Representatives and a weak majority in the Senate is rather favorable for financial and budgetary balances, because there should be more discussions on expenditure and the budget”, explained Laurent Le Grin, head of convertible management at Degroof Petercam AM.

“This may help ease some pressure on spending and the US budget,” he added.

At the center of investors’ attention, there are also and above all the inflation figures for the United States in October, expected on Thursday.

The challenge for the markets is “to know whether these figures will pave the way for a slowdown in the pace of monetary tightening (of the Federal Reserve, editor’s note) in December and at the beginning of next year”, clarifies Craig Erlam, analyst at Oanda.

The US central bank has been aggressively raising its key rates since March to control soaring prices. Market players consider that it would take an improvement on the inflation front combined with a deterioration in the labor market in the United States to hope for a change in its monetary policy.

Meta reorganization

Meta, the parent company of Facebook, will cut 11,000 jobs, or about 13% of its workforce. The title climbed 8.06% around 11:55 a.m.

In the US technology sector, which showed signs of slowing in the third quarter, other stocks in the sector were rather down.

Snap (-6.18%), Lyft (-0.41%) and Amazon (-2.55%), which previously announced wage measures, were retreating. Zoom fell by 7.48% and Uber by 2.55%.

As for the Walt Disney action, it plunged 11.79% after its streaming platforms recorded losses more than doubled in one year.

Without rap, Adidas slips

The German sports equipment manufacturer Adidas has slashed its earnings forecast for 2022 – expected net profit of 250 million euros against the double before -, after ending its juicy collaboration with the bubbling American rapper Kanye West at the end of October.

The group nevertheless has “options” to sell the rising sneakers “Yeezy” and plans to take advantage of the world football in Qatar to garner 400 million euros in sales of jerseys and shoes. The action, down 50% since the start of the year, gained 3.70% on Wednesday.

On the side of currencies and oil

The dollar rebounded, taking advantage of its safe haven status.

Around 11:50 a.m., the greenback took 1.17% to 1.1410 dollars for one pound, and was up more moderately by 0.28% against the euro, at 1.0046 dollars.

On the cryptocurrency side, bitcoin fell 8.30% to $17,145, after briefly falling below $17,000, its lowest level since November 2020. The setbacks of the FTX platform, which had to call on its rival Binance to deal with a liquidity problem and will now sell most of its business to it, adding to concerns about the sector.

Oil prices continued to fall, weighed down by US crude oil commercial reserves rising sharply last week.

Around 11:50 a.m., a barrel of Brent from the North Sea for delivery in January 2023 fell 2.15% to 93.30 dollars.

The barrel of American West Texas Intermediate (WTI) for delivery in December lost 2.33% to 86.84 dollars.

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