The war in Ukraine has tended to increase uncertainty regarding inflation and growth prospects. When and with what consequences this war will end is pure speculation, but capital markets are expected to build a certain immunity to the headline risks in the coming weeks. The medium- to long-term consequences, on the other hand, could be significant. It is possible that we are at the beginning of a new bloc formation or a new Cold War. This would put a significant damper on globalization and further fuel higher structural inflation. 

US equities accelerated to the upside to finish the mid-week solidly higher amid a slew of data heading into the Thanksgiving holiday break. The move upward came following the release of the minutes from the Fed’s November monetary policy meeting, which indicated some caution among Committee members. Earnings reports continued to pour in, with Deere & Company stock rallying following its results, while HP and Autodesk lowered their guidance. The Dow Jones Industrial Average increased 0.3%, the S&P 500 Index was up 0.6%, and the Nasdaq Composite advanced 1.0%.  Elsewhere, European markets also closed higher as investors cheered better-than-expected PMI data showing the Eurozone economic contraction eased in November and prices pressures cooled. 

  • Asian equity markets rose on Thursday as investors digested the Bank of Korea’s decision to opt for a smaller 25 basis point rate hike and as they assess the implications of surging Covid cases in China on the global economy and markets. Shares in Australia, Japan, South Korea and Hong Kong advanced. Meanwhile, mainland China shares gained slightly in choppy trade. 
  • European shares are seen heading for a mixed open while markets in the US will be closed today for the Thanksgiving holiday and will close early on Friday. 
  • Oil prices fell on Thursday, extending losses from the previous session, as fears of supply disruption eased on news that the G7 nations were considering a high price cap on Russian oil. Brent and US West Texas Intermediate both plunged more than 3% on Wednesday on news that the planned price cap could be above the current market level. 
  • Most Federal Reserve officials believe the central banks should slow the pace of interest rate hikes, minutes from its latest gathering earlier this month showed. The minutes, released Wednesday, support expectations the Fed will raise rates by 50 basis points in December, ending a run of jumbo 75 basis point increases. 
  • Durable goods orders in the US jumped 1% month-over-month in October, following a downwardly revised 0.3% increase in September and beating market forecasts of a 0.4% rise. This marked the biggest rise in four months, led by transportation equipment and military aircraft. 
  • The number of Americans filing new claims for unemployment benefits rose by 17,000 to 240,000 last week, the most since August and well above expectations of 225,000. This was likely boosted by the wave of layoffs in technology companies. 
  • Deere & Company announced fiscal Q4 EPS of $7.44 on Wednesday, topping the $7.11 estimate, with revenues rising 37.0% year-over-year (y/y) to $15.5 billion, well above the Street’s estimate of $13.4 billion. The company issued full-year net income guidance that came in above expectations, noting that positive farm fundamentals, fleet dynamics, and an increased investment in infrastructure are expected to support healthy demand for its equipment. 
  • Tesla shares jumped almost 8% on Wednesday after hitting a 52-week low a day earlier. The rally followed an upgrade by analysts at Citi and an indication from Tesla CEO Elon Musk that South Korea is a top candidate for a new factory the company hopes to build in Asia. 
  • Foxconn has begun offering 10,000 yuan, roughly $1,400, to any workers who choose to leave, an unusual decision intended to appease disgruntled new hires who played a central role in violent protests that rocked the world’s largest iPhone factory. Apple’s main global production partner said in an online notice the sum, to be paid out in two instalments, will help smooth the journey home for employees.