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Today's Headlines:
-Chinese Stocks Surge as Beijing Eases Some Covid Restrictions
-FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall
-Crypto Lender BlockFi Halts Withdrawals, Citing FTX's Problems
-Rising Rates Hit Banks' Bond Holdings
-EU Lowers 2023 Growth Outlook, Raises Inflation Forecasts as War in Ukraine Takes Toll
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Stocks appear poised to book a robust week of gains, despite continued fears of a potential economic recession, as the Federal Reserve works to tame the stubbornly high cost of living.
Signs of a potential cooling off on the inflation front helped the major indexes post their biggest gains in more than two years on Thursday and the mood ahead of the bell on Friday was helped further by news that China had eased some pandemic controls.
Chinese stocks surged after top officials in Beijing said they would try to minimize the economic impact from the country's zero-Covid policy and promptly eased some of its quarantine restrictions.
Hong Kong's benchmark Hang Seng jumped 7.7% in its biggest single-day rally since March, taking its increase so far this month to around 18%. Stocks of internet-platform companies, electronics-parts manufacturers and Chinese real-estate developers were among the biggest gainers.
The Shanghai Composite closed 1.7% higher on Friday, while China's CSI 300 gauge of the largest stocks listed in mainland China jumped 2.8%.
Read more here.
Stocks to Watch:
LegalZoom shares soared 15% off hours after it reported a narrower loss and higher sales for the recent quarter and lifted its outlook.
Toast raised its 2022 outlook and issued fourth-quarter guidance above analysts' estimates. Its shares climbed 8.5% off hours.
Forex:
The dollar extended its losses to reach a near three-month low as investors bet on the Federal Reserve slowing the pace of interest rate rises after Thursday's inflation data.
Along with the inflation data, the dollar also took a hit from reduced safe-haven flows after China eased some Covid-19 curbs, ING said.
"Still, we think it's premature for a sustained dollar downtrend, as a Fed pivot is not a given yet and risk assets continue to face a variety of headwinds."
ING also said the euro's current gains against the dollar are unlikely to last with the exchange rate likely close to its short-term peak.
"There were already very few indications that the euro was particularly oversold before the recent upward correction: now, we are likely looking at an even more balanced positioning," ING said.
"We see room for a return to EUR/USD parity in the near term."
Read also: Bitcoin Recovers After Lower-Than-Forecast US Inflation Data
Bonds:
The inversion of the two-to-10-year part of the Treasury yield curve is running out of steam, which means the short end of the curve and market expectations of the Fed's policy rate remain key drivers for long rates, SEB said.
The 10-year Treasury yield could rise back to 4.3% within the next three months, SEB added. The downtrend in Treasury yields could begin only once markets gain confidence that Fed interest rate increases have peaked in this cycle.
Energy:
Oil prices added close to 3% in Europe as China eased some of its strict Covid-19 rules.
Chinese officials said the new measures would aim to reduce the impact of Covid-19 restrictions on economic growth. The moves will offer a big boost for commodities, whose demand has suffered because of China's harsh lockdowns.
Metals:
Base metals rallied and gold futures edged up on the news from China.
"With peak Fed in the bag, thanks to a downside surprise in inflation data, pessimism at year-end around the earnings outlook could be offset by optimism on China, mainly if the country takes a less hardline stance on rising Covid cases," SPI Asset Management said.
TODAY'S TOP HEADLINES
SoftBank Posts Profit of More Than $21 Billion After Selling Alibaba Shares
TOKYO-SoftBank Group Corp. swung back to black for the first time in three quarters in the July-to-September quarter with a profit of more than $21 billion as gains from a sale of some of its stake in Chinese e-commerce company Alibaba Group Holding Ltd. offset losses at its Vision Fund investments.
SoftBank reported an investment loss of nearly $10 billion for its Vision Fund 1, Vision Fund 2 and other funds in the latest quarter.
Crypto Lender BlockFi Halts Withdrawals, Citing FTX's Problems
Cryptocurrency lender BlockFi Inc. said it was pausing withdrawals and limiting activity on its platform, becoming the latest casualty of the sudden collapse of Sam Bankman-Fried's crypto empire.
"We are shocked and dismayed by the news regarding FTX and Alameda," BlockFi said late Thursday on its Twitter account, referring to the crypto exchange FTX and an affiliated trading firm, Alameda Research, both controlled by Mr. Bankman-Fried.
FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall
Crypto exchange FTX lent billions of dollars worth of customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting the stage for the exchange's implosion, a person familiar with the matter said.
FTX Chief Executive Sam Bankman-Fried said in investor meetings this week that Alameda owes FTX about $10 billion, people familiar with the matter said. FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call, one of the people said.
Toyota, Sony Set Up Advanced Chip Business in Japan
TOKYO-Toyota Motor Corp. and Sony Group Corp., together with six other Japanese companies, are creating a new business to design and make next-generation semiconductors by the late 2020s.
The venture, called Rapidus, Latin for "rapid," comes amid rising competition among major economies for advanced chips to support applications such as artificial intelligence and quantum computing.
TikTok, Struggling With Slowing Digital-Advertising Industry, Lowers Ad-Revenue Outlook
SINGAPORE-TikTok's slashing of its advertising-revenue outlook shows the fast-growing short-video app isn't immune to the ad weakness reported by other social-media companies.
TikTok has lowered its target for this year's advertising revenue to $10 billion from at least $12 billion, Chief Executive Shou Zi Chew told staff in an online meeting that took place in recent weeks, according to the employees who attended the meeting.
TuSimple Co-Founder Ousts Board That Fired Him Last Month
Co-founder and former chief executive of TuSimple Holdings Inc. Xiaodi Hou combined forces with another major shareholder to oust the self-driving trucking company's board of directors, according to a securities filing Thursday.
The extraordinary move by Mr. Hou and fellow TuSimple co-founder Mo Chen follows the board's decision on Oct. 30 to oust Mr. Hou from his roles as CEO and chairman. Board members at the time said they made the move in connection with a continuing investigation they were conducting into TuSimple's relationship with a Chinese startup called Hydron Inc.
United Airlines Advances 5% Pay Raise for Pilots
United Airlines Holdings Inc. is giving pilots a 5% pay raise months ahead of schedule as the airline and its pilots union have struggled to come to terms on a new contract.
United had promised during the Covid-19 pandemic that it would boost pilots' pay once the airline started earning consistent profits again-a provision that was included in a broader agreement between the airline and its pilots union, aimed at preventing furloughs at a time when travel demand was still languishing and the airline was losing money.
Brookfield Seeks to Expand Role as Capital Provider to Large Companies
Brookfield Asset Management Inc., which has raised $33 billion in fresh investment capital since the end of June, expects to land more opportunities such as its recent construction-financing agreement with computer chip giant Intel Corp. as companies seek to repatriate manufacturing operations.
Supply-chain disruptions and rising geopolitical instability are driving U.S. manufacturers to shift production home, and Brookfield aims to benefit from the trend. The Toronto firm has amassed roughly $21 billion in its latest main infrastructure fund and $17 billion in a real-estate investment pool as investors increasingly have turned to real assets to protect their portfolios against inflation.
California Home Solar-Subsidy Revisions Boost Industry Stocks
California on Thursday released plans to revise a key rooftop solar subsidy, nearly a year after a proposed cut in payments to homeowners who send excess power to the grid sparked a backlash from clean-energy advocates and others.
The new plans would reduce payments that homeowners with solar panels on their roofs can receive by selling electricity back to the grid, but they would not impose a monthly connection fee that was included in the earlier proposal.
Viatris Executive Charged in Insider-Trading Scheme Allegedly Netting Millions
A top technology executive at the healthcare company Viatris Inc. was charged with sharing illicit stock tips that netted millions of dollars for a friend who traded on them, according to the Justice Department.
Ramkumar Rayapureddy, the global chief information officer at Viatris, shared undisclosed information about a regulatory drug approval, his employer's financial results and a planned merger with a division of Pfizer Inc., authorities said. When he worked at Mylan NV, a predecessor company to Viatris, Mr. Rayapureddy allegedly leaked the information to a friend, Dayakar Mallu, according to an indictment.
Chinese Stocks Surge as Beijing Eases Some Covid Restrictions
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11-11-22 0609ET
