Meta and Twitter are headed for a bit of a bullish start to the week
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(Boursier.com) – After European markets, Wall Street will try to move forward. Futures are still cutting their lead as the opening approaches… The US stock market has only lost two consecutive weeks, its first since September: the S&P 500 lost 2.1%, the Dow Jones Industrial Average lost 1.7% and the Nasdaq Composite lost 1.7%. 2.7%. Central banks led by the Fed and the ECB lowered investors’ hopes that the latter would quickly end monetary tightening after weaker-than-expected U.S. inflation data last week.
After the Fed announced a 50-basis-point interest rate hike, Fed Chair Jerome Powell reiterated that while policy decisions were made at the meeting, monetary policy was still not tight enough, based on incoming data. Fears are about the dire consequences of this very tight monetary policy, which could lead to a deep recession with significant job destruction and a significant drop in corporate profits.
“Many factors are pointing to inflation moving forward, suggesting that central banks, particularly the Fed, will continue to be extremely hawkish, possibly more than markets are pricing in,” Bloomberg Television told Bloomberg Television. Charu Chanana, chief strategist at Saxo Bank, added that he was also concerned that “we will experience a recession in our earnings next year.”
The session promises to be relatively quiet with no economic indicators or corporate results. The news will strengthen slightly in the coming sessions before the markets close for a long Christmas weekend. In the coming days, investors will be keeping a close eye on the latest price index added to personal consumption expenditures – the infamous PCE index, the Fed’s preferred inflation measure – as well as a new reading of US GDP for the third quarter (2.9% consensus). ) and some information about the real estate market. The Conference Board’s consumer confidence index is also in the program.
But it is the PCE index that will be under particular scrutiny as the evolution of inflation should determine the pace of the Fed’s next rate hikes. On a monthly basis, PCE is expected to rise 0.1% in November, down from 0.3% in the previous month. Year-over-year, PCE is expected to grow by 5.5%. Core PCE, excluding food and energy components, is expected to rise 0.2% from the previous month – unchanged from October – up from 5% in October to an annualized 4.7%.
In the foreign exchange market, the dollar is trying to stabilize with the dollar index hovering above 104 pts (-0.1%), while the euro is up 0.3% above $1.06 among banks. Bitcoin is trading below $16,750. Finally, in the oil market, Brent crude rose 1% to close to $80 a barrel, as optimism about the Chinese economy and a recovery in demand from the leading consumer nation outweighed fears about Covid-19 and a global recession.
In business news, Nike, FedEx, Micron Technology, CarMax and even Carnival results will be the main events of the week.
* you are here is gaining pre-market interest after its iconic CEO Elon Musk polled Twitter users on whether he should step down as the social network’s CEO. The billionaire declared that he would respect the results of the survey… According to the final result, 57.5% of the respondents were in favor of the sulphurous leader’s departure. More… Tesla shares are down 57% this year, with operators worried that the Twitter takeover and its chaotic takeover will make the electric carmaker second only to the world’s second-richest man.
Should I do Twitter? I make a request. — Elon Musk (@elonmusk), via Twitter
* Meta, Facebook’s parent company violated EU antitrust rules by abusing its dominant position in online advertising markets. After a preliminary investigation, the European Commission accuses Meta of linking its online advertising service, Facebook Marketplace, with Facebook, its personal social network. He also worries that Meta could impose unfair trading terms on its Facebook Marketplace competitors for its own benefit. The regulator reminds that sending a protest statement does not determine the outcome of the investigation. But if this violation of European rules is confirmed, Meta faces a fine of up to 10% of its annual revenue.
* L3Harris Technologies will acquire rocket engine maker Aerojet Rocketdyne Holdings in an all-cash deal for $4.7 billion. The $58 per share offer is 6.5% above Aerojet’s Friday closing price on Wall Street. Reuters reported last month that L3Harris, which emerged from the 2019 merger of L3 Technologies and Harris Corp, was among the companies vying to take over Aerojet, which was put up for sale after the antitrust regulator blocked a merger with Lockheed Martin earlier this year.
Aerojet designs and manufactures rocket propulsion and hypersonic engines for space, defense, civil and commercial applications. The group notably produces RS-25 engines for NASA launchers, as well as RL10 engines that power launch vehicles manufactured by United Launch Alliance, a joint venture between Boeing and Lockheed Martin. Investing in the space and cyber industry, L3Harris is trying to solidify its position among major aerospace and defense companies as one of the Pentagon’s top contractors.