Wall Street in the Red Zone and floundering in the European and Asian markets for the second session in a row

Asia European stock Mixed trends Wall Street

Wall Street in the Red Zone and floundering in the European and Asian markets for the second session in a row

Wall Street in the Red Zone and floundering in the European and Asian markets for the second session in a row: Traders are waiting for central banks’ decisions around the world this week,
especially after the emergence of the new Omicron strain challenge, bringing caution to grips with midweek growth. 

Evest follows market developments in the following report.


Wall Street declines for the second session in a row

US producer prices jump the most since July

Mixed trends in Europe

Important meetings of central banks around the world this week

Oil is declining

Mixed trends of stock indices in Asia

England warns that the value of  Bitcoin  will reach  zero 

Wall Street declines for the second session in a row

The US stock market declined for the second session in a row ,
against the backdrop of a two-day meeting of the Federal Reserve System (FRS) that started on Tuesday.

Experts believe that the U.S. Central Bank may decide to increase the rate of reduction,
of the asset buyback program,
and are waiting for his
acknowledgment on the timing of the prime rate increase.

The emergence of the new Omicron strain is likely to put pressure on g\

lobal growth with some countries imposing restrictive measures to contain the spread of the coronavirus,
but this factor will also delay the labor market rebound and supply chain
addressing problems that lead to increased inflation. 

US producer prices jump the most since July

Statistics released on Tuesday showed the biggest jump in US producer prices in November since July.
The PPI rose by 0.8% from the previous month, while experts expected producer prices to slow to 0.5% from 0.6% in October.

US producer prices rose 9.6% on an annual basis in November,
the fastest pace since data tracking began in November 2010, after rising 8.6% the previous month. 

Analysts had predicted a 9.2% increase, according to data from Trading Economics.

Sam Stovall, the chief investment analyst at CFRA Research,
said investors are selling recent gains in technology and non
core consumer companies where their businesses could be hit by rising interest rates in the US economy.

“Investors are still impressed by Fed Chairman Powell’s recent tough statements,
and are seeking profits before the end of the year,” the expert said.

European stock indices changed in different directions based on Tuesday’s trading.

The composite index of the largest company in the region,
Euro Stoxx, fell by 0.84% and reached 469.56 points.

The German stock index, DAX, fell by 1.08% by the end of the year,
the French KAC index – by 0.69%, and the British FTSE 100 – by 0.18%.

In the meantime, the Spanish IBEX 35 index rose by 0.67%,
while the Italian FTSE MIB index rose by 0.02%.

Gains in commodity and banking stocks were partially offset by ,
a decline in travel-related stocks under uncertainty ,
about the potential impact of the new Omicron strain.

The World Health Organization (WHO) warned against the faster spread of omicron,
than any other strain of the coronavirus and expressed concern ,
about allegations of the strain moderation prior to the publication of official scientific findings.

Important meetings of central banks around the world this week

The meeting of the world’s largest central banks has a key role in traders’ focus this week.

The Federal Reserve System (FRS) holds a two-day meeting from December 14 to 15,

and the European Central Bank (ECB) and the Bank of England release their decisions on December 16,
and the Bank of Japan on December 17.

The unemployment rate in the UK fell to 4.2% in August and September,
the lowest level since mid – 2020, according to statistics released on Tuesday.

The number of people applying for unemployment benefits,
in the country in November fell by 49.8 thousand after falling by 14.9 thousand in October,

according to data from the Office for National Statistics (ONS).

The index fell for the ninth month in a row with economic recovery from the Coronavirus pandemic. 

Meanwhile, the number of British citizens employed rose last month by 257 thousand.

According to one JPMorgan asset management analyst:
“The latest labor market report may be enough to convince the Bank of England that it is time to raise interest rates.

However, the emergence of a new strain of Omicron presents uncertainty.“

“We expect the central bank to decide not to change the current interest rate,
in the hope that the situation will improve by February,” the expert added.

Oil is declining

The August futures price for Brent oil in London Futures Exchange reached $72.99 per barrel,
0.96% lower than the closing price of the previous session. 

The price of West Texas Intermediate crude oil futures for January in electronic trading on the New York Mercantile Exchange (NYMEX) is $69.91 per barrel,
1.16% below the closing price on December 14.

Stock indices in the Asia-Pacific region show multi-directional dynamics on Wednesday: Japan’s Nikkei 225 grow at 0.11%, while China’s CSI 300 is fall by 0.30%.

US Standard & Poor’s futures rise by 0.14%.

REngland warns that the value of  Bitcoin  will reach  zero 

The Bank of England said Bitcoin could become “worthless”,
and people who invest in the digital currency should be prepared to lose everything.

Warning about the potential risks to investors, the Central Bank questioned whether there was any inherent value in the most prominent digital currency, which rose this year to close to $50 thousand.

The cryptocurrency peaked above $67000 in early November,
but experienced a selloff after first news of the Omicron variant of the coronavirus,
before stabilizing at its current level last week.

The deputy governor, Sir John Cunliffe,
said the bank should be prepared for the risks associated,
with the rise of the origin of the cryptocurrency after its rapid growth in popularity. 

“Their price can vary significantly and [Bitcoin currencies] can theoretically or practically fall to zero,”
he told the BBC.

The market value of crypto-assets has grown tenfold since early 2020 to about $2.6 trillion,
representing about 1% of global financial assets. 

About 0.1% of UK household wealth is in Bitcoin and similar cryptocurrency assets,
such as Ethereum and Binance.

Up to 2.3 million people have cryptocurrency assets, an average of around £300 each.