U.S. stock futures were in the dark spot ahead of Wednesday’s beginning following a choppy trading session on Wall Street on Tuesday, which was partially caused by the most recent collapse in the cryptocurrency world. Treasury yields and the dollar both strengthened.
A legislative deadlock for the foreseeable future had already been priced in, depressing the value of the dollar while boosting stocks and bonds on the assumption that no significant new fiscal spending would relieve pressure on inflation and the Federal Reserve. However, the Democrat vote’s tenacity may now prompt a re-evaluation of the 2024 presidential election, not least because former President Donald Trump is anticipated to declare his intention to run again next week.
Regardless of the poll’s outcome, the cryptocurrency market’s issues have gotten worse due to concerns about selling after a prominent exchange came dangerously close to collapsing on Tuesday and global contagion.
A day after the leading exchange FTX crumbled under a wave of withdrawals, necessitating a bailout by larger rival Binance, cryptocurrencies plunged once further on Wednesday.
Mainstay cryptocurrency Bitcoin had a peak-to-trough decline of 20% this week as a result, falling to its lowest level in almost 2 years on Tuesday before seeking assistance just above $17,000. Bitcoin has lost nearly 75% of its value over the past year. But on Wednesday, it fell back 7% again following an overnight rebound.
Tesla (TSLA.O) shares fell quite so much as 5% on Tuesday as filings revealed that owner Elon Musk sold over $4 billion worth of Tesla shares before his takeover of Twitter, which may have had something to do with the cryptocurrency shakeout.
Following the bell on Tuesday, Walt Disney (DIS.N) stock fell 9% as the media giant failed earnings projections and continued to lose money from its foray into streaming video.
China reported its factory gate prices fell in October for the first time since December 2020, underscoring waning domestic demand as harsh COVID regulations and a property downturn batter the economy. As the global markets eagerly await U.S. October inflation numbers on Thursday.
To contain the largest epidemic in the city, millions in the southern production hub of Guangzhou will be compelled to take COVID-19 testing on Wednesday. Although the broad market indices in China fell on Wednesday, shares of Chinese real estate developers rose as officials increased a programme encouraging bond issuance in the troubled industry.
The yen remained stable as Japan reported that its current account surplus decreased in the first half of the 2022 fiscal year to its lowest level in eight years, primarily because of the skyrocketing price of imported goods with dollar-based prices.
Meanwhile, According to a person familiar with the situation, Barclays Plc (BARC.L) has reduced the number of employees it has in corporate and investment banking (CIB), following rivals who have also done the same to save costs as deals fell short of records set in the previous year.
Investment bankers were inundated with acquisitions in 2021, but this year has been much quieter as businesses have decided against mergers and IPOs due to market volatility, US-China tensions, and the conflict in Ukraine.
Leading banks like Goldman Sachs Group (GS.N) & Deutsche Bank (DBKGn.DE) consequently felt pressured to reduce their personnel through mergers and acquisitions (M&A).
In addition, Bloomberg News said on Tuesday that Citigroup Inc. (C.N) had cut dozens of positions throughout its investment banking division.
Less than 3% of Barclays’ investment banking staff was affected by the layoffs, the source claims. Barclays declined to comment when it was reached out to.
The decision, which Bloomberg has previously reported, was made two weeks right after the British bank disclosed a third-quarter 45% decline in advising fees from M&A that was somewhat mitigated by a strong showing in the fixed income, currencies, and commodities (FICC) division.
