The rate of bitcoin fell by 4% during trading on Thursday after the publication of data on higher-than-expected inflation in the United States.
The price of bitcoin at 16:11 CST fell by 4.4% compared to the closing level of the previous trading and amounted to $18,312 thousand, which is the lowest level since June 18.
The rate of ether (Ether) fell by 6.6%, to $1.212 thousand.
Consumer prices (CPI index) in the US in September rose by 8.2% compared to the same month last year, showed data published on Thursday by the country’s Ministry of Labor. Thus, inflation slowed to a seven-month low from 8.3% in August, but was higher than the 8.1% expected by analysts polled by Bloomberg.
On a monthly basis, the CPI index increased by 0.4%, although analysts were expecting a rise of 0.2%.
Meanwhile, consumer price growth excluding the cost of food and energy (Core CPI) in September accelerated to 6.6% in annual terms from 6.3% in August.
“The whole world is looking at US inflation data to try and predict what the Fed is doing,” said Stefan Rast, founder of research firm Truflation.
Higher-than-expected inflation raises the possibility of another 75 basis point rate hike at the next Fed meeting on November 1-2.
U.S. chip makers are recalling employees from China’s leading memory chip maker, Yangtze Memory Technologies Co. (YMTC), writes The Wall Street Journal, citing informed sources.
In particular, we are talking about KLA Corp. and Lam Research Corp., which are suspending cooperation with a Chinese state-owned company after Washington imposed restrictions blocking the supply of high-tech semiconductor components and equipment for their production in China.
U.S. companies have suspended maintenance on existing equipment at the YMTC facility and have also stopped installing new equipment, sources said.
In total, dozens of employees of American companies are involved in the plant, who play a key role in maintaining the operation of the enterprise, having the expertise necessary for high-tech production, the sources say.
If these employees do not return to work, YMTC will not be able to modernize production in the future, and will also face difficulties when equipment needs to be repaired.
Under new export controls announced last Friday, high-performance computing, supercomputing and artificial intelligence (AI) chips made using US technology can only be sold to China with an export license.
Washington also banned US citizens and organizations from working with Chinese chipmakers without special permission.
In addition, the US-announced package severely restricts exports to China of chip manufacturing equipment and technologies that local companies could use to develop their own equipment.
According to Boston Consulting Group estimates, US companies account for 41% of global production of equipment for the production of chips, China – no more than 5%.
Futures for US stock indices fluctuate between growth and decline in trading on Thursday after the publication of data from the Ministry of Labor, which showed the maximum increase since June this year in the number of applications for unemployment benefits in the US.
The number of Americans who applied for unemployment benefits for the first time increased by 29 thousand last week and amounted to 219 thousand people.
According to revised data, a week earlier the number of applications was 190 thousand, and not 193 thousand, as previously reported. Analysts polled by Bloomberg expected the figure to rise to 204,000, on average.
Traders take a cautious stance ahead of the publication of September data on the number of jobs and unemployment in the US. The Department of Labor will release them on Friday at 3:30 pm ET.
The consensus forecast of experts polled by Market Watch suggests that the number of jobs in the US last month increased by 275 thousand (315 thousand in August), while maintaining unemployment at 3.7%.
The situation in the US labor market is a key factor influencing the policy of the Federal Reserve System (Fed), and the upcoming publication of unemployment data makes traders take a wait-and-see attitude, experts say.
Another report from the Department of Labor, published earlier this week, showed a sharp decline in the number of open vacancies in the States in August. The indicator fell by 10% – the fastest pace since the start of the pandemic in 2020, to 10.1 million vacancies.
These data were perceived by investors as a signal of “cooling” of the US labor market, which may hold back further tightening of the Fed’s policy.
However, industry organization ADP said on Wednesday that the number of jobs in the US private sector in September rose by 208 thousand compared to August – more than expected. Analysts polled by Dow Jones had forecast a 200,000 increase after rising 185,000 in August.
Shares of Peloton Interactive Inc. adding 0.2% in price during preliminary trading on Thursday. The US fitness equipment manufacturer plans a fourth round of layoffs that will affect 500 jobs.
Conagra Brands rose 0.4%. The prepared food manufacturer ended the first quarter of fiscal 2023 with a loss, but the company’s adjusted figure and revenue exceeded experts’ expectations.
Share price of International Business Machines fell 0.4%. The company has announced plans to invest $20 billion in business development in the Hudson River Valley over the next decade.
The value of the December E-mini futures on the S&P 500 fell by 0.01% to 3793.75 points by 15:55 Moscow time on Thursday. The quotation of the December E-mini futures on the Dow Jones index decreased by this time by 0.06%, to 30293 points. Futures on the Nasdaq 100 for December rose 0.19% to 11646.25 points.
Stock markets in Western Europe are actively rising during trading on Tuesday, following the US stock market and stock exchanges in the Asia-Pacific region (APR).
The composite index of the largest companies in the Stoxx Europe 600 region rose by 2.01% by 11:18 a.m. to 398.70 points.
The German DAX index rose by 2.25%, the French CAC 40 – by 2.7%, the British FTSE 100 – by 1.46%. The Italian FTSE MIB and the Spanish IBEX 35 gained 2.46% and 2.02% respectively.
American stock indices finished the first trading session of the fourth quarter with a steady growth, the rise of the Dow Jones Industrial Average was the highest since February, amounting to 2.7%.
Global markets are supported by hopes that incoming pessimistic statistics may force central banks to slow down the pace of tightening monetary policy, writes Trading Economics.
Statistical data, published on Monday, showed a decline in the index of business activity in the US manufacturing sector in September to the lowest level since May 2020. This was taken by the market as a signal that the tightening of the policy of the Federal Reserve System (Fed) is beginning to suppress economic activity, experts say.
The ISM Manufacturing Index fell to 50.9 last month from 52.8 a month earlier, according to the Institute for Supply Management (ISM). Analysts on average expected it to fall to 52.2 points, according to Trading Economics.
Shares of Credit Suisse Group AG rise in price by 4.5%, recovering from the fall the day before on concerns about the ability of the Swiss bank to restructure its business. At the same time, the head of Credit Suisse, Ulrich Körner, announced the stability of the bank’s finances.
Papers of the British Legal & General Group added 4.9%. The insurance company said it would continue to support pension fund clients hit by the sharp rise in interest rates.
The leading gainer among the components of the Stoxx Europe 600 index is British bakery chain Greggs PLC, which gained 9.3%. The shares of the Swiss manufacturer of vacuum equipment VAT Group AG (+6.9%) and the French IT company Atos SE (+6.8%) are also actively growing.
Quotes of futures for US stock indices are declining due to the general decline in interest in risk in world markets.
Statistical data, published on Thursday, confirmed the contraction of US GDP in the second quarter. The country’s economy in April-June 2022 decreased by 0.6% on an annualized basis, according to the final data of the US Department of Commerce, which coincided with the previous estimate and forecasts of analysts surveyed by Trading Economics.
The number of new jobless claims in the US, meanwhile, reached its lowest level since May. The indicator decreased last week by 16,000 to 193,000 from 209,000 a week earlier, the country’s Ministry of Labor reported. Analysts, on average, expected an increase in the number of applications to 215K compared to the previously announced level of the previous week (213K), according to Trading Economics.
The price of shares of CarMax Inc., engaged in the sale of used cars, collapsed during preliminary trading by 15% due to weak reporting of the company. Last quarter, CarMax’s net income more than halved to $0.79 per share from $1.72 per share a year earlier, worse than the average forecast of experts surveyed by FactSet at $1.39 per share. Quarterly revenue increased 2% to $8.14 billion, also falling short of market expectations ($8.54 billion).
Alibaba Group Holding shares lost 3.1% after JPMorgan Chase analyst Alex Yao lowered the company’s target price to $135 from $145. The expert retained an overweight recommendation for Alibaba shares, but noted that he is cautious about the company’s outlook given the weakening consumer spending in China.
The price of Kraft Heinz Co. stable in pre-trading despite UBS’s upgraded recommendation for US food maker shares to Neutral/Sell.
The share price of Occidental Petroleum rose 0.1%. On the eve it became known that the investment company of the American billionaire Warren Buffett Berkshire Hathaway bought another 6 million shares of Occidental, increasing its share to 20.9%.
Berkshire fell 0.95%.
The share price of the American pharmacy chain Rite Aid Corp. fell by 12%. The company’s net loss in the second financial quarter ended August 27 more than tripled year-on-year to $331.3 million, or $6.07 per share, from $100.3 million, or $1.86 per share. Rite Aid wrote off $252.2 million last quarter due to a business reorganization.
The value of the December E-mini futures contract for the S&P 500 fell by 1.2% by 15:55 CST on Thursday and amounted to 3686.5 points. The quote of the December E-mini futures on the Dow Jones index decreased by this time by 0.99%, to 29456 points. Futures on the Nasdaq 100 for December fell 1.5% to 11381.25 points.
Quotes of futures for US stock indices change without any dynamics on Wednesday.
Investors fear that the US Federal Reserve’s determination to fight persistently high inflation will continue to push up borrowing costs, hurting the economy and corporate profits, MarketWatch writes.
“Our main view is that further tightening of US financial conditions is unlikely to stop until the economy either enters a clear recession or shows steady progress on inflation,” wrote Goldman Sachs analyst Dominic Wilson.
The yield on ten-year US government bonds rose above 4% per annum during trading on Wednesday, updating the maximum since April 2010, according to The Wall Street Journal. Moreover, the yield of US government bonds shows a record growth rate in four decades amid fears that the Fed is not going to abandon its policy of raising rates to combat the highest inflation in four decades.
Meanwhile, Hurricane Ian is approaching the US state of Florida, which has almost reached the fifth category on the scale of hurricane winds, the Associated Press reported on Wednesday.
According to the US Air Force, “Ian” rapidly gained strength in the Gulf of Mexico and at 7 am local time (14:00 KST) was 105 km from the coastal city of Naples, which is located in Florida.
The state’s losses from the effects of the hurricane could exceed $45 billion, Enki Research expert Chuck Watson predicted. Ian could be one of the eight worst hurricanes in US history, according to the National Oceanic and Atmospheric Administration.
Shares of Tyson Foods Inc. rise in price by 0.5%. The American food manufacturer made changes in the company’s management, including replacing the financial director.
Papers Lyft Inc. decrease by 1.1%. The American taxi ordering service will stop hiring new employees before the end of this year.
Share price of Apple Inc. decreases by 2.3%. The company is abandoning plans to increase production of new iPhone 14 models due to weak demand, Bloomberg writes, citing people familiar with the matter.
The value of the December futures E-mini on the Dow Jones index by 15:43 CSK increased by 0.37% and amounted to 29310 points. Quotation of the December E-mini futures on the S&P 500 rose by this time by 0.23%, to 3669.50 points. Futures on the Nasdaq 100 index for December lost 0.13% and reached 11,319 points.
