Hanna PaulThe markets are depressed today as global players the UK and US hunched over due to inflationary stress as Britain’s consumer price index (CPI) almost doubled, way beyond the expected 3.9% to 4.2% in October, according to Wednesday’s release.
Asian markets followed suit, matching the dim sentiment projected by the developed world. Emerging markets saw most national indices buckle with China’s Shanghai and Hang Seng and India’s National Stock Exchange. Taiwan index having a solo party in the green.
Switzerland expects its trade balance and industrial production data for October while France and Spain expect auction results.
In Asia, Japan looks forward to stock bond investment numbers while the Reserve Bank of Australia takes the podium today along with its global counterparts in their countries, including European Central Bank’s Fabio Panetta, US Federal Reserve’ John Williams and the European Central Bank’ Philip Lane.
Commodities crowd the red as markets stay scared of potentially hawkish monetary policy coming up.
Alibaba and National Grid to release results while Kohl’s, Macy’s and Workday, the latter group expected to boost sentiment as they were healthy during the pandemic. The US dollar index, which gauges the strength of the dollar against a basket of six currencies, edged up 0.15% in early trade. The bourse grew 6.8% year to date.
Key world events today : Economics, politics and markets (Images from Shutterstock)
- A brief world politics and trade
- A glance at oil, metal and renewables
- News on deals, earnings and divestitures from companies
- Top business and economic news today
- Markets today:
- What to watch today:
- Stock indices around the world
A brief world politics and trade
Global inflation leading to hyperinflation?
Global inflation has been on an uptick, as the UK inflation data indicates, signalling banks to put a lid on prices and take a hawkish stance on monetary policy. Warnings of potential hyperinflation awoke last month with Twitter CEO Jack Dorsey tweeting that “its happening.” Experts disagree, saying that we have not breached those levels or come close.
Hyperinflation is going to change everything. It’s happening.
— jack⚡️ (@jack) October 23, 2021
Hyperinflation is a situation where sky rocketing prices erode the value of a nation’s bank notes and coins. The situation has not turned that lacklustre, experts maintain. Inflation impacts financial assets more than costs in the real economy while hyperinflation is a state of diminished value where leading an ordinary household becomes a task, the classic German example of needing a wheelbarrow of cash to purchase a loaf of bread.
Typically, an economy has to rise over 50% for it to be defined as hyperinflation, levels we are far away from at this point.
“Hyperinflations are rare birds. By my count, there have only been 62 episodes of hyperinflation in world history, and none have occurred in the United States,” Steve H Hanke, a professor of applied economics at Johns Hopkins University and an expert in the area of hyperinflation, told CNBC in an interview.
CEO of investment management firm Ark Wood, Catherine Wood, dismissed Dorsey’s statement and instead expects a deflation in the economy. Fed chair Jerome Powell noted that the inflationary stress is transitory, earlier in the year.
Traders expect the Bank of England to be the first to turn hawkish, later this year.
On Wall Street today, main bourses declined with the Dow down 0.6% and Nasdaq and the S&P 500 stumbling about 0.3% each.
Biden takes power
US President Joe Biden requested the Federal Trade Commission to allow manufacturers to repair four months ago, due to which the world’s largest company Apple Inc, allowed self repair on their phones, an expensive affair otherwise. Now Biden has written to the chair of the Federal Trade Commission raising concerns over “anti-consumer behaviour by oil and gas companies” in the face of rising petrol prices for American consumers, forcing the institution to act against the ongoing crisis, citing the global issue of rising gas prices.
“The bottom line is this: gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining,” Biden said in a letter dated Wednesday to FTC chair Lina Khan. The president said the competition watchdog should “consider whether illegal conduct is costing families at the pump...immediately,” as pressure mounted on him to cope with rising energy and oil companies as we approach winter. US petrol prices jumped over 60%.
Warner Music to buy David Bowie’s songwriting catalogue for $535m
The record label behind song writer Madonna and Frank Sinatra, Warner Music, is raising $535m in debt to acquire one among the biggest song books in the market, David Bowie’s song catalogue, and make other possible acquisitions.
UK launches national security probe on shady deal
US chipmaker Nvidia said its proposed acquisition of Arm would benefit its counterpart’s UK chip design company’s customers and the country’s chipmaker industry. The UK launched a national security probe into the agreement negotiations as Nvidia’s data chip and gaming centre played well and reported revenue propelled by 50% in the third quarter.
Since the deal was announced, the US chipmakers value was uplifted to over $730bn as its shares jumped over 130%.
The latest UK investigation driven by concerns that Nvidia said had been raised by the US Federal Trade Commission quenched the company’s hopes of completing an Arm deal by next March. The deal had been “under review” by authorities ever since the acquisition was revealed 14 months ago.
US Treasury market in need of infiltration
US policymakers and financial experts vouch for reforms to the world’s most important government bond market, US treasuries, that was thrown into chaos in march as investors, when hit by the pandemic, tried to sell off big chunks of their treasury holdings. The $22trn market, should be prevented from future shocks and disarray, that is easily incited by the rough economic and political climate.
The world’s biggest company Apple enables “Right to Repair”
With a market value of $2.25trn, the world’s biggest listed company, Silicon Valley’s Apple Inc, announced its devices could be repaired at home by users from now, four months after Biden signed an executive order calling on the FTC to write regulations to enforce manufacturers to allow “the right to repair.”
Mutual fund company Green Century, filed the right to repair resolution with Apple Support that caused a shareholder resolution to be filed by environmental advocates with the company in September asking tech giant Apple to re-evaluate its stance on making the independent repair option available for its users. The issue was brought to the Securities and Exchange Commission on Wednesday.
Apple repair tweetThat is exactly what Apple seems to be doing with its new Self Service Repair programme. Announced this morning, the programme will allow members of the general public to order genuine Apple parts in order to make basic iPhone repairs at home — something Apple has long argued is too dangerous for individuals to do. According to Apple, Self Service Repair will initially focus on the display, battery, and camera for iPhone 12 and 13 models. Individuals interested in doing screen repairs or battery replacements for those models at home will be able to place an order for genuine Apple parts through a new Apple Self Service Repair Online Store, send in their old part for recycling, and receive a new one.
- India's Prime Minister Narendra Modi warns bitcoin could spoil young Indians.
“We are choked with news and starved of history” – Durant
— Elon Musk (@elonmusk) November 18, 2021
A glance at oil, metal and renewables
Oil prices were dim as concerns over constricted supply calmed as reports of the US requesting China to release oil reserves hinted at a possible hike in US shale activity.
Precious metals gold and silver traded low with the yellow metal losing a marginal 0.2% and silver falling over 0.4%.
News on deals, earnings and divestitures from companies
Fashion and luxury’s very own Macy’s, Kohl’s and Asia’s Alibaba are reporting earnings results today along with and several smaller stocks.
Top business and economic news today
- Sterling at highest peak against euro in over one and a half years: UK’s pound sterling hit peak on Wednesday, its highest since February 2020 after UK inflation valued at its highest since 2011.
- Yoghurt maker Chobani files for IPO: Debt ridden yoghurt maker Chobani turns to the public to sell its stock in the open market hoping to raise funds to pay off its debt. The company held a debt burden of $1.4bn.
European Union trade balance last reported negative of -0.281bn.
- Wall Street’ and UK’s startling inflation scare puts emerging markets under pressure: Emerging markets trading low as global counterparts surpassed by accelerating inflation in the UK and US.
- Switzerland trade balance: The Federal Customs Administration is to release Switzerland’s trade balance, a measure of balance between import and export, which was last reported at CHF5,052m.
Take crypto-currency or bitcoin for example.
— PMO India (@PMOIndia) November 18, 2021
It is important that all democratic nations work together on this and ensure it does not end up in wrong hands, which can spoil our youth: PM @narendramodi
Markets today:
- Stocks: Wall Street and FTSE were in the red, hunched over by global inflation as the UK reported a level higher than expected. Asian stocks bummed as China’s Hang Seng and Shanghai losing about half a per cent to one following larger trend.
- Oil: Oil price dips 0.3% while silver doubles to 0.6%. Natural gas flat to low.
- Gold: Gold and silver trade in the green today along with other commodities as concerns over aggressive inflation and its consequences boosted its safe haven appeal in the face of a stronger greenback and weaker bond yields.
- Forex: US dollar retreats along with yields, risk mood to drive markets as US weekly jobless claims set to release today.
- Crypto: BTC falls over 1.% percent in early trade today.
Source: TwitterWhat to watch today:
- British, French, German and Italian car registration: Two of them, British and Italian, were seen dipping to 24.6% and 35.7%, and the French widening to 30.7%
- US weekly jobless claims: Expected to be 260,000 in October, less than 267,000 last month.
- Japan's national core CPI: Forecast 0.1% year-on-year for October.
- Macy’s earnings: Estimated earnings per share (EPS) of 0.8046 US cents.
- Kohl’s Corp earnings: Expected revenue £24.54bn.
- Alibaba earnings: Estimated EPS of 2.33 US cents.
- Workday earnings: 0.5998 cents per share seen.
- Other earnings: Other income releases expected today include National Grid, Applied Materials, Palo Alto Networks, Li Auto and many smaller stocks like Paladin Energy.
Stock indices around the world
Europe
Index | Country | Change | % Change | Level |
England | -10.18 | -0.14% | 7,281.02 | |
Europe | +2.81 | +0.20% | 1,390.72 | |
France | +21.14 | +0.30% | 7,177.99 | |
Germany | +22.71 | +0.14% | 16,273.84 | |
Switzerland | +4.10 | +0.03% | 12,604.25 |
US
Index | Country | Change | % Change | Level |
United States | -211.17 | -0.58% | 35,931.05 | |
United States | -12.23 | -0.26% | 4,688.67 |
Asia
Index | Country | Change | % Change | Level |
Australia | +9.20 | +0.12% | 7,713.20 | |
China | -16.66 | -0.47% | 3,520.71 | |
Hong Kong | -330.36 | -1.29% | 25,319.72 | |
India | -218.77 | -0.36% | 59,789.56 | |
Japan | -89.67 | -0.30% | 29,598.66 | |
Taiwan | +77.33 | +0.44% | 17,841.37 |
Read more: UK Autumn Budget 2021: Key announcements
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