Stansberry Research

Friday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

ECB says ‘a few’ officials preferred half-point October hike – Bloomberg. “A few” European Central Bank officials favored a smaller increase in interest rates in October to tackle record inflation, an account of their last meeting showed.

Fed minutes show most officials favored slowing rate rises soon – WSJ. Most Federal Reserve officials thought they should slow the pace of interest-rate increases after approving a 0.75-percentage-point rate rise at their meeting earlier this month to battle high inflation.

ECB's Schnabel pushes back on smaller rate hikes – Reuters. European Central Bank board member Isabel Schnabel pushed back on Thursday against calls from many of her colleagues for smaller interest rate increases by the ECB, saying this could hamper efforts to bring down inflation.

Bank of Korea needs strong signs inflation curbed before pivot – Bloomberg. The Bank of Korea needs to see strong signs that inflation is under control before discussing any prospect of a pivot away from policy tightening, Governor Rhee Chang-yong said Friday.

China’s record COVID surge hits recovery hopes – WSJ. The prospect that Beijing’s zero-tolerance approach to Covid-19 persists well into next year means the world can’t rely on China to be a locomotive of growth as the U.S. and European economies slow.

Market Headlines:

Global Macro:

Bank of Mexico Deputy Governor Gerardo Esquivel said the central bank runs the risk of raising interest rates too far in its bid to contain inflation, according to the minutes from this month’s monetary policy meeting - WSJ.

Tokyo’s inflation outpaced forecasts to hit its fastest clip since 1982, an acceleration that suggests nationwide price growth will also quicken in November after months of yen weakness and elevated energy costs - Bloomberg. 

Russia's Federal Security Service (FSB) said on Thursday that it had prevented Ukrainian special services from carrying out what it said was sabotage on the "South Stream" gas pipeline - Reuters.

Ukrainian authorities worked to bring back electricity supplies in several cities including Kyiv, as they confront a deepening humanitarian crisis after Russian missile barrages damaged critical infrastructure across the country as part of what the U.S. called a campaign by Moscow to freeze Ukraine into submission - WSJ.

The world economy will be as weak next year as it was in 2009 after the financial crisis as the conflict in Ukraine risks becoming a “forever war,” the Institute of International Finance said - Bloomberg.

The global economy continued to deteriorate as 2022 draws to a close, but not as severely as economists previously feared, raising the possibility the world could avoid a deep slump next year - WSJ.

Eastern Europe's arms industry is churning out guns, artillery shells,  and other military supplies at a pace not seen since the Cold War as governments in the region lead efforts to aid Ukraine in its fight against Russia - Reuters.

Turkey’s central bank said it's ending its monetary easing cycle, bowing to a call by President Recep Tayyip Erdogan to take interest rates into single digits by the end of the year - Bloomberg.

Ghana's government is working on a new policy to buy oil products with gold rather than U.S. dollar reserves, Vice-President Mahamudu Bawumia said on Facebook on Thursday - Reuters.

Fresh evidence Wednesday pointed to a slowing U.S. economy and a cooling labor market that suggests steep interest-rate hikes by the Federal Reserve are starting to have a broader impact - Bloomberg.

Company Specific:

Ford Motor is recalling 634,000 sport utility vehicles (SUVs) worldwide over fire risks from possible cracked fuel injectors and will urge owners to have their cars inspected, it said on Thursday - Reuters.

Apple said it was working to resolve worker complaints at the world’s biggest iPhone factory in China after police were filmed beating protesting employees at the plant this week and employees began an exodus Thursday - WSJ.

Apple CEO Tim Cook, who championed the development of Apple’s China supply chain, before he took over from Steve Jobs in 2011, is developing alternatives, with assembly partners such as Foxconn making more iPhone 14 models in India than any previous generation and using the country as an export base - Bloomberg.