MARKET WRAPS
Watch For:
ECOFIN Budget meeting of EU finance ministers; U.K. GDP, trade, business investment; Industrial production data for U.K. and Italy; trading updates from Allianz, Sberbank, AngloGold Ashanti, Cellnex Telecom, Koninklijke Vopak, Compagnie Financiere Richemont, Pernod Ricard, IMCD, ASML Holding
Opening Call:
European stock futures were lower as investors parse Fed Powell's hawkish comments. Asian stock benchmarks were lower; Treasury yields and the dollar weakened; oil futures rose and gold fell.
Equities:
European stock futures were tracking lower with sentiment likely weighed by Federal Reserve Chair Jerome Powell warning on Thursday that the central bank wouldn't declare an end to its historic interest-rate increases until it had more evidence that inflation was cooling.
We entered November on the back foot and clearly, the biggest headwinds for stocks were rising Treasury rates, a stronger dollar, and rising energy prices," said Art Hogan, chief market strategist at B. Riley Wealth.
"All three of those have now reversed."
Forex:
The U.S. dollar weakened in Asia but concerns over higher-for-longer U.S. rates could support demand for the greenback.
Fed Chair Powell asserted the Fed won't hesitate to tighten further if necessary, even as it proceeds "carefully," RBC Capital Markets said.
However, analysts at Helaba Research cautioned that the U.S. dollar's run of gains could come to an end next year.
"In 2024, not only the yield advantage but also the growth advantage of the U.S. is likely to diminish," they said.
Bonds:
Treasury yields were tracking lower after Thursday's gains on Fed Chairman Powell's comments.
"Fed Chair Powell's remarks at the IMF today were a reminder that the FOMC still has a tightening bias," said economist Michael Feroli of JPMorgan Chase & Co.
Energy:
Oil futures gained in Asia.
Oil found some support from the Saudi energy minister saying demand is healthy, blaming recent price drops on speculators, Saxo Markets said.
This could mean risks of more production cuts, but the market's immediate focus remains on pricing out the war premium and demand weakness amid central banks' hawkish stances, Saxo said.
Metals:
Gold prices fell early Friday.
While the precious metal has lost some upward momentum over the past two weeks as the Israel-Hamas war hasn't escalated into a regional conflict, its medium-term uptrend remains intact as long as the $1,903 support level holds, Oanda said.
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Copper declined in Asia amid negative sentiment across markets spurred by Fed Chair Powell's hawkish remarks overnight.
A hawkish Powell and a weak 30-year Treasury auction have combined to dampen risk sentiment, the APAC Strategy Team at Saxo Markets said.
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Iron ore prices rose on strong demand for steel, Huatai Futures analysts said.
China's supportive macroeconomic policy was lifting overall sentiment on expectations of increased demand for steel and steelmaking materials, such as iron ore.
In the short term, steel inventories were likely to stay at low levels, with the shortage of scrap steel further supporting iron ore prices, the analysts added.
TODAY'S TOP HEADLINES
Even if the Fed Stays on Hold, Jerome Powell Is Keeping His Options Open
Fed Chair Jerome Powell indicated the central bank wouldn't declare an end to its historic interest-rate increases until it had more evidence that inflation was cooling.
Price and wage pressures have eased recently, leading more investors to think the Fed is done raising rates. Powell disappointed those investors in a speech Thursday by explaining why he thinks the Fed is more likely to tighten policy than ease it if any change is warranted.
Fed's Barkin: Swings in long-term Treasury yields not a useful variable for deciding interest-rate policy
The movement in long-term bond yields may be capturing headlines, but it isn't a great guide for deciding what to do with interest rates, Richmond Fed President Tom Barkin said Thursday.
"I don't think long rates are quite useful as a policy variable," Barkin said during a conversation webcast by MNI. "They can move, you know, pretty significantly over a relatively short time period."
Fed's Paese says more data on inflation is needed before bank weighs another rate hike
The interim president of the St. Louis Federal Reserve Bank said the U.S. central bank "can afford to wait for further data" on the economy and inflation before deciding whether to raise interest rates again. She made her remarks at an event in Jefferson, Ind.
Kathleen O'Neill Paese on Thursday said she supported the Fed's decision last week to leave a key short-term interest rate unchanged. She said she was persuaded in part by talks with business leaders that indicated inflation pressures and labor shortages were easing.
Chinese, American-It Doesn't Matter. Israel Wants Inexpensive Drones.
Hours after Hamas launched its deadly attack on Oct. 7, the requests from Israel came flooding into U.S. suppliers: drones, as many as possible, as soon as possible.
Israel Says 80,000 People Left Northern Gaza Thursday
Israeli troops advanced toward the heart of Gaza City, while Israeli officials said 80,000 residents traveled south Thursday, the largest movement so far in the five days since the humanitarian corridor was opened.
The military said it was closing in on the "heart of intelligence and operational activities" of militant group Hamas in an area of Gaza City near Al-Shifa hospital. The zone, the military said, was home to a war room for directing fighting, a large training ground and munitions factories used to make rockets, antitank missiles, drones and other explosives. Kindergartens and mosques were nearby, the military said.
Gaza Tensions Undercut Ukraine's Peace Summit Hopes
BERLIN-A Ukrainian push for a high-level summit aimed at bolstering international support for its fight with Russia is losing steam, a casualty of rising tensions in the Middle East, Western diplomats said.
Dozens of countries-including India, South Africa, Brazil and other major powers that have been neutral on the war between Ukraine and Russia-have for months sought to define core principles, such as the territorial integrity of states, that could underlie peace talks.
Vatican Says Transgender People May Be Baptized
ROME-The Vatican said transgender people may be baptized as Catholics and can serve as godparents, in the latest sign of the church's greater openness to LGBTQ people under Pope Francis.
The Vatican also said that the children of gay couples, including ones who are adopted or born to surrogate mothers, may be baptized, and that such couples may serve as godparents.
Meta Strikes Deal to Return to China After 14 Years
SINGAPORE-Meta Platforms has struck a preliminary deal to sell a new, lower-priced version of its virtual-reality headset in China, regaining a foothold among consumers in the country 14 years after Facebook was shut out.
The agreement with Tencent Holdings will make the world's largest videogame company the exclusive seller of Meta's headsets in China, people familiar with the matter said, offering the U.S. technology giant a major new market as it looks to boost tepid global demand for its niche gear. Tencent will start selling the headset beginning late 2024, with the two companies reaching a deal after about a year of negotiations.
Microsoft Temporarily Blocked Internal Access to ChatGPT, Citing Data Concerns
Microsoft temporarily blocked employee access to ChatGPT on company devices, with a notice to employees citing security concerns, according to an internal blog post.
Employees who tried to go to the site on Thursday afternoon were briefly redirected to an internal notice that said the website was blocked by their organization, people familiar with the matter said. After more than an hour, access was restored, they said.
Celsius Network, One of Crypto's Biggest Collapses, Ends Bankruptcy Case
Celsius Network, the crypto platform that touted itself as safer than a bank, won court approval to end its bankruptcy case and release most of its remaining cryptocurrency back to hundreds of thousands of customers whose funds have been trapped since last year.
The plan approved in a New York bankruptcy court Thursday also creates a new company built around Celsius's crypto mining and staking activities, wrapping up a first-of-its-kind bankruptcy process that saw intense involvement from individual customers who fought to influence the outcome.
Netflix, Warner's Max Team Up With Verizon to Offer Discounted Streaming Bundle
Two of the nation's highest-profile streaming services are being bundled together at a discount.
Verizon is planning to offer the ad-supported versions of both Netflix and Warner Bros. Discovery's Max streaming services for about $10 a month combined instead of about $17, according to people familiar with the situation.
Warren Buffett traded stocks in which Berkshire Hathaway was investing: ProPublica
Billionaire and investing legend Warren Buffett traded stocks in his personal account that his company Berkshire Hathaway was also buying and selling, according to a new report from ProPublica.
The report, published Thursday, citing data said to have been leaked from the Internal Revenue Service, alleges Buffett traded equities in his personal account during the same quarter, or the quarter prior, as Berkshire Hathaway BRK.A MX:BRKB traded those same stocks in 2009 and 2012. Stocks that Buffett and Berkshire both traded in during that period are said to have included Walmart WMT, Wells Fargo WFC and Johnson & Johnson JNJ.
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Expected Major Events for Friday
05:30/NED: Sep Manufacturing output
06:00/FIN: Sep Industrial Production
06:00/FIN: Sep Balance of Payments
07:00/SWE: Sep New orders & deliveries in industry
07:00/SWE: Sep Industrial Production Index
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11-10-23 0015ET
