European stocks were higher on Thursday as traders continued to
react to Jerome Powell's confirmation that a lower pace of Federal
Reserve rate hikes to combat inflation was more likely in coming
"While it could be argued that Powell's comments were relatively
balanced--slower tightening now but rates high for longer--the last
year has proven that anticipating the path of inflation even a
short period ahead is incredibly difficult," OANDA said.
"Knowing what the Fed intends to do next is far more valuable
than what it thinks it may do 6-12 months down the line."
Stocks to Watch
Heineken's reconfirmed 2022-23 guidance, together with its
midterm outlook, shows that the group is at an early stage of a
program set to deliver higher and profitable growth, Jefferies
The brewer is expected to deliver higher volume growth given its
diverse market exposure, including Asia, Latin America and Africa.
Heineken's strategy also seems to be focusing on scalable
opportunities within premium beer and a more assertive approach to
revenue growth management, Jefferies said.
"As confidence in Heineken's compounding ability increases, we
expect shares to re-rate."
Stock futures retraced a tiny part of the previous session's big
bounce as traders awaited important economic data.
The S&P 500 surged 3.1% on Wednesday following the
less-hawkish speech by the Powell. It took the benchmark's gains
since its 2022 low in mid-October to 14.1%, after recent signs of
easing price pressures had encouraged risk appetite once more.
"With so much money on the sidelines, fund managers may need to
move into catch-up mode, so I suspect the market makers will
position to get ahead of this flow in the new year so that the
stock market dips will be shallow," SPI Asset Management said.
The dollar's falls since Powell signaled the pace of rate
increases may slow in December could be an overreaction and the DXY
dollar index is likely to stay above 105.00, ING said.
"His [Powell's] core message was one of stubbornly high core
inflation. We continue to take the view that a trade-weighted
measure like DXY can hold support levels around the 105 area [or at
least will not sustain any break under it.]"
Focus now will center on today's core PCE data and Friday's
monthly jobs data, ING said.
Sterling hit a one-week high against a weaker dollar and the
gains could extend further depending on upcoming U.S. data, ING
The rally in GBP/USD could extend to the 1.22-1.23 area unless
the core personal consumption expenditure price index data or the
nonfarm payrolls report on Friday "can put a floor back under U.S.
yields," ING said.
Eurozone government bond yields fell in early trading as
European investors reacted to Jerome Powell's speech.
"Powell was less hawkish than had been expected when he spoke
yesterday, " Mizuho said.
The U.K. Debt Management Office is due to sell GBP2.25 billion
in the 1.25% July 2051 gilt on Thursday and this bond is expected
to outperform in the coming weeks, RBC said.
"Historically, we have observed that 30-year recently issued
bonds outperform from around 2 months prior to a new 30y bond being
launched," RBC said, as a new 30-year bond will be launched in
However, RBC is cautious given the increased gilt supply from
the Bank of England's sale of emergency gilt purchases.
"With the outlook of the sector looking highly unfavorable over
the coming weeks given the BOE's emergency sales operations, we
remain cautious into this event."
Crude oil futures inched lower in European trading, with prices
giving back some of the sharp post-Powell gains on Wednesday.
France will have to import a good deal of electricity this
winter, according to national transmission-system operator RTE.
The country is already a slight net importer of energy to date
this year, and "we must count on a winter where we will be a major
[net] importer, because we need this electricity," RTE said.
Imports will come from most neighboring countries, including the
France has historically been a major net exporter of
electricity, RTE said. Its comments come at the end of a year in
which utility EDF--which owns RTE--has been forced repeatedly to
cut output estimates, as maintenance work and labor action have
weighed on nuclear reactors.
Eni's potential acquisition of oil-and-gas producer Neptune
Energy would be against current industry trends but fits the
company's long-term gas strategy, Equita said.
The Italian player is in early talks to buy the private-equity
backed firm for around $5 billion-$6 billion, Reuters reported,
citing an unnamed source.
"European oil majors... have been more inclined to sell
traditional upstream assets rather than buy them in favor of
buyback programs or acquisitions in low carbon," Equita said.
Yet, the acquisition would allow Eni to expand its gas portfolio
and would be in line with its goal to increase its gas weight to
more than 90% of its production by 2050.
Read OMV Sets out New Corporate Structure in Move Toward
Copper prices eased lower, while the rest of the base metals
complex and gold gained, as investors weighed China's possible
reopening and the Fed's signal on monetary policy.
DOW JONES NEWSPLUS
Ships Linked to Russia's Biggest Grain Exporter Moved Stolen
Vessels linked to Russia's largest grain trader shipped
thousands of tons of stolen Ukrainian grain to global buyers, using
a sophisticated system of feeder vessels and floating cranes,
according to an investigation by The Wall Street Journal.
The ships are linked either through their management or
ownership to companies controlled by Russian businessman Peter
Khodykin, who in turn owns RIF Trading House LLC, the country's
largest grain exporter and a big player in global grain markets,
according to corporate and legal documents reviewed by the
France Prepares for Targeted Blackouts If Energy Crisis, Cold
Winter Strain Grid
PARIS-France has prepared a contingency plan to conduct rolling
blackouts this winter if its electrical grid comes under severe
stress, officials said, as the country struggles to ramp up its
fleet of nuclear reactors after a rash of outages.
Corrosion discovered on pipes near the cores of several reactors
led France to take more than half of them offline earlier this
year, causing a sharp drop in nuclear generation. The outages have
compounded Western Europe's energy woes as the region grapples with
a sharp cut in natural-gas deliveries from Russia amid the conflict
over Ukraine. Twenty-two of France's 56 nuclear reactors are
currently offline, according to government data.
Sasol Sees 1H EPS Rising Despite Operational Challenges
Sasol Ltd. said Thursday that it expects earnings per share to
rise more than 20% in the first half of fiscal 2023, though
operational challenges persisted in the second quarter.
The South African chemicals-and-energy group didn't provide a
specific range for the six months ending Dec. 31. However, last
year it posted EPS and headline EPS of 23.98 South African Rand
($1.39) and ZAR15.21, respectively.
EU Official Warns Elon Musk That Changes Are Needed at
BRUSSELS-A top European official warned Elon Musk that Twitter
Inc. would need to make significant changes to comply with a new
European Union law governing social-media platforms and content
Thierry Breton, the EU's commissioner for the internal market,
held a video call with Mr. Musk on Wednesday to discuss the new
legislation, called the Digital Services Act. He said Mr. Musk-who
completed his purchase of Twitter in October-stated he planned to
get the service ready for the new rules, but Mr. Breton added that
more work would be needed.
Ukraine Says Russia Is Sending Hundreds of Paramilitary Troops
to Eastern Front
Russia is sending hundreds of paramilitary troops to fight in a
key city on the front line in eastern Ukraine that is fast becoming
the focal point of the next phase of the Kremlin's invasion, a
senior Ukrainian official said Wednesday.
Andriy Yermak, Ukraine's chief of presidential staff, said the
Wagner Group, a paramilitary organization linked to the Kremlin, is
sending fighters, including convicts, to the front lines in
Bakhmut, eastern Ukraine.
EU Says It Can't Seize Frozen Russian Central-Bank Assets for
BERLIN-European Union officials said the bloc can't confiscate
tens of billions of euros worth of frozen Russian central-bank
funds to pay for Ukraine's reconstruction, while its executive body
sent proposals to member states on setting up an international
court to prosecute Russian officials for this year's invasion.
Pressure had been building up for months from some member states
for Brussels to come up with ways to seize Russian assets and hold
top Russian leaders accountable for the war.
Spending Report to Offer Clues About Consumers' Strength This
An October household spending report will show how consumers
fared as the holiday season approached, with high inflation and
rising interest rates weighing on the economy.
The Commerce Department will release spending, income and
inflation figures at 8:30 a.m. Eastern time on Thursday. The report
will offer a broad picture of consumer health, with spending trends
on services such as travel, housing and utilities.
Rising Tether Loans Add Risk to Stablecoin, Crypto World
The company behind the tether stablecoin has increasingly been
lending its own coins to customers rather than selling them for
hard currency upfront. The shift adds to risks that the company may
not have enough liquid assets to pay redemptions in a crisis.
Tether Holdings Ltd. says it lends only to eligible customers
and requires that borrowers post lots of "extremely liquid"
collateral, which could be sold for dollars if borrowers
China Caixin Manufacturing PMI Marks Fourth Straight Month of
A private gauge of activity in China's manufacturing sector
remained in contractionary territory for a fourth straight month in
November, as the government's stringent Covid restrictions
continued to weigh on both output and demand.
The China Caixin manufacturing purchasing managers index
slightly improved to 49.4 in November from 49.2 in October,
according to data released Thursday by Caixin Media Co. and S&P
Jerome Powell Signals Fed Prepared to Slow Rate-Rise Pace in
WASHINGTON-Federal Reserve Chair Jerome Powell provided a clear
signal that the central bank is on track to raise interest rates by
a half percentage point at its next meeting, stepping down from an
unprecedented series of four 0.75-point rate rises aimed at
combating high inflation.
Mr. Powell, in a speech Wednesday, said an overheated labor
market needed to cool more for the Fed to be confident that
inflation would decline toward its 2% goal.
U.S. Economic Growth Slowed This Fall, Fed's Beige Book Says
U.S. economic growth eased this fall with business activity in
some parts of the country stalling or declining, the Federal
Reserve said in a Wednesday report.
Businesses also expressed greater uncertainty and increased
pessimism for the U.S. economy as prices and interest rates
continue to rise, according to the central bank's latest
compilation of economic anecdotes from around the country, known as
the Beige Book.
FTX Collapse Draws Senate Hearing Scrutiny as Crypto Oversight
WASHINGTON-Senators with a plan to regulate cryptocurrencies are
due to question the Commodity Futures Trading Commission's chairman
about the failure of the digital-asset exchange FTX and on
legislation that would give that agency more power over the
CFTC Chairman Rostin Behnam is scheduled to testify at
Thursday's hearing of the Senate Agriculture Committee. The panel's
chairwoman, Sen. Debbie Stabenow (D., Mich.), and its ranking
member, Sen. John Boozman (R., Ark.), introduced a bill that would
regulate trading in bitcoin, ether and some other cryptocurrencies
through the commission. Giving the CFTC, a relatively small agency,
authority to police trading in the most valuable crypto assets
would mark a substantial expansion of its authority.
Democrats to Reshape Presidential Primary Calendar as Joe Biden
Mulls 2024 Bid
WASHINGTON-Democratic National Committee members are struggling
to reach consensus on what would be the first major change since
2006 in the party's early-state lineup for presidential primaries,
as they await input from the White House.
The national party organization's Rules and Bylaws Committee is
set to meet in Washington over two days starting Friday to try to
approve a slate of early contests that would offer greater
diversity and union representation. The effort has echoes from 16
years ago, when Nevada and South Carolina were selected to join
Iowa and New Hampshire to open the 2008 nomination race. The full
DNC is expected to ratify changes early next year.
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(END) Dow Jones Newswires
December 01, 2022 06:06 ET (11:06 GMT)
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