Current market assumptions of a Republican election to the U.S. Congress in Tuesday’s midterm election seem so far out of place based on early results, leaving investors to ponder the implications for the 2024 White House race beyond the expected. political stalemate.
The Democrats in office performed better than expected, with the ability to keep the Senate, limit expected losses in the House of Representatives, and win major government bids. After losing a key seat in Pennsylvania, Republicans must now win two of three Senate races in Georgia, Arizona and Nevada to take control of the chamber.
After a volatile session on Wall St on Tuesday, marked in part by the latest implosion in the cryptocurrency universe, US stock futures were in the red towards the opening on Wednesday. Dollar and Treasury yields strengthened.
The likelihood of a legislative deadlock for the next two years had already been assessed – undermining the dollar but backing stocks and bonds on the principle that no new large fiscal spending would reduce the pressure on inflation and the Federal Reserve. But the resilience of the Democratic vote could now lead to a rethinking of the 2024 presidential race, especially as former President Donald Trump is expected to announce his intention to race again next week.
Regardless of the survey results, troubles in the cryptocurrency world have increased amid fears of widespread contagion and sales after a major stock exchange neared collapse on Tuesday.
Cryptocurrencies plummeted again on Wednesday, a day after the major FTX exchange caved in on a withdrawal street, forcing rival Binance to bail it out.
The cryptocurrency’s pillar bitcoin, which has lost nearly 75% of its value over the past 12 months, fell by 20% this week, hitting its lowest level in nearly two years on Tuesday before stabilizing just above $ 17,000. But after a brief rebound overnight, it plunged 7% again on Wednesday.
Perhaps partly linked to the cryptocurrency crisis, Tesla shares fell 5% on Tuesday after documents showed owner Elon Musk sold nearly $ 4 billion worth of Tesla stock prior to its acquisition by Twitter.
Shares of Walt Disney fell 9% after the bell on Tuesday after the entertainment giant missed its profit forecast and racked up further losses from its video streaming push.
While global markets eagerly await US inflation data for October on Thursday, China reported that factory prices fell last month for the first time since December 2020, underscoring weakening inflation. Domestic demand as tight COVID restrictions and the housing crisis hit the economy.
Millions of people in Guangzhou’s southern manufacturing center will have to undergo COVID-19 tests on Wednesday in an effort to control the city’s worst outbreak. But while broader Chinese equity indices were in the red on Wednesday, shares of Chinese real estate developers rebounded as regulators extended a program to support bond issuance in the struggling sector.
The yen remained stable after Japan said its current account surplus fell in the first half of fiscal year 2022 to its lowest level in eight years, largely due to the rise in imported commodities. at the dollar price.
Key Developments That Could Drive US Markets Throughout Wednesday:
* Remaining results of the midterm elections of the US Congress.
* Speech by Richmond Federal Reserve Chairman Thomas Barkin
* The US Treasury is auctioning 10-year banknotes.
* Results from American companies: DR Horton, Wynn Resports, Roblox
* Finance ministers meet at COP27 climate conference in Egypt