Stansberry Research

Wednesday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

New Zealand steps up inflation fight with record rate hike – Bloomberg. New Zealand’s central bank raised interest rates by a record 75 basis points and signaled further tightening ahead, stepping up its inflation fight even as it forecasts a recession next year.

Mester says lowering inflation remains Fed's main goal – Reuters. Federal Reserve Bank of Cleveland President Loretta Mester reiterated Tuesday that getting inflation down remains critical for the central bank.

Western allies aim to agree on Russian oil price cap Wednesday – WSJ. The U.S. and its allies are seeking to agree as soon as Wednesday on a level for a price cap on Russian oil, with officials discussing setting it at around $60 a barrel as the group rushes to complete the plan, according to people familiar with the talks.

EU proposes brake on gas prices as Russia squeezes again – Bloomberg. The European Commission proposed an emergency brake on natural gas prices way above current levels, as it seeks to contain the economic damage from Russia’s tightening squeeze on energy supplies.

Fed's George says it could take higher interest rates for longer to encourage saving – Reuters. The Federal Reserve may need to raise interest rates to a higher level and hold them there for longer in order to successfully moderate consumer demand and bring down high inflation given the amount of spare savings households still hold since the pandemic, Kansas City Fed President Esther George said on Tuesday.

Market Headlines:

Global Macro:

Singapore on Wednesday projected its economic growth rate for next year to come in as low as 0.5%, as an export slump underscores a worsening global outlook – Nikkei Asia.

President Volodymyr Zelenskiy appealed to Ukrainians to conserve energy amid relentless Russian strikes that have halved the country's power capacity, as the United Nations health body warned of a humanitarian disaster in Ukraine this winter - Reuters.

China is imposing coronavirus controls in Beijing and other major cities as infections soar to near record levels, less than two weeks after saying it would ease the country's strict zero-COVID policy – Nikkei Asia.

The European Central Bank must lift interest rates by at least a half-point in December to tackle record inflation, according to Governing Council member Gediminas Simkus, who considers a larger move still an option – Bloomberg.

Bundesbank President Joachim Nagel opened the door on Tuesday to smaller interest rate increases by the European Central Bank but said there was still a long way to go in raising borrowing costs - Reuters.

The global economy should avoid a recession next year, said the Organization for Economic Co-operation and Development (OECD), but the worst energy crisis since the 1970s will trigger a sharp slowdown, with Europe hit hardest, and fighting inflation should be policymakers' top priority - Reuters.

About four in five U.S. consumers now describe buying conditions for homes as bad, a record in data going back to 1978, according to the University of Michigan’s consumer sentiment survey for November - Bloomberg.

Firms that invest in buying homes reduced their purchases by 30% in the third quarter, a sign that the rise in borrowing rates and high home prices that pushed traditional buyers to the sidelines are causing these firms to pull back, too - WSJ.

President Joe Biden announced that his administration would extend the pandemic-era pause in student loan repayments through June 30 amid legal challenges to his college debt-forgiveness plan – Bloomberg.

Company Specific:

Chinese search-engine giant Baidu’s Executive Vice President Dou Shen said in an earnings call with analysts that the U.S. export controls would have a limited short-term impact on the company, and he believes its AI businesses would benefit from the new rules in the long run - WSJ.

HP will eliminate as many as 6,000 jobs over the next three years amid declining demand for personal computers that has cut into profits – Bloomberg.

Manchester United‘s American owners, the Glazer family, announced on Tuesday that they were exploring the sale of one of the most famous sports teams in the world, setting up a potentially record-breaking auction 17 years after they bought the club - WSJ.

Fidelity National Information Services plans to dismiss thousands of workers as part of incoming Chief Executive Officer Stephanie Ferris’s strategy to win back investor confidence after the fintech giant slumped 44% this year - Bloomberg.

FTX says a substantial amount of crypto assets stolen or missing as a run on customer deposits and a liquidity crunch precipitated a crisis of leadership and led the high-flying firm to a rapid collapse – WSJ.