GLOBAL MARKETS-World stocks slip, await CPI, U.S. midterms outcome

(adding closer to the US market)

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Market watchers turn to key US inflation data on Thursday

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US Democrats are performing better than expected in the midterms

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Bitcoin falls as Binance pulls out of FTX deal

By Herbert Lash

NEW YORK, Nov 9 (Reuters) – U.S. stocks fell sharply and the dollar rose on Wednesday as investors awaited whether the results of U.S. midterm elections and key data on consumer prices could affect Federal Reserve policy. and interest rates.

A contract for the main cryptocurrency exchange FTX fell late in the session as the biggest competitor Binance said it is attracting, good news that increases concern about the sector’s stability.

Stocks in Europe and on Wall Street fell as the results of midterm elections remained unclear as a better-than-expected showing by Democrats undermined views on spending and legislation.

“After a few days of good market performance, the fact that there is some uncertainty about the midterm elections led to today’s decline,” said Michael Arone, chief investment officer at State Street Global Advisors and Boston said.

“The market is demanding, they just haven’t got it.”

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The stock market tends to work better under a divided government.

The S&P 500’s average annual return is 14% in a divided Congress and 13% in a Republican-controlled Congress under a Democratic president, according to data since 1932 analyzed by RBC Capital Markets. That compares to 10% when Democrats control both the presidency and Congress.

Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, said, “The market will get what it wants: it will divide the government.

“It won’t change the budget significantly, but it will prevent any material increase in spending,” he said.

On Wall Street, the Dow Jones Industrial Average fell 1.95%, the S&P 500 slid 2.08% and the Nasdaq Composite fell 2.48%.

MSCI’s broadest global index lost 1.64% and the pan-European STOXX 600 index fell 0.30%. Overnight and Asian shares rose as the election results came in first.

Walt Disney Co fell 13.16%, its biggest one-day decline in 21 years, after the entertainment giant reported losses mostly from its investment in streaming video, while Meta Platforms Inc gained 5.18% after parent Facebook said it would cut 13% of it. employees.

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Investors were happy with Meta’s decision to cut costs, but the weak media market for the company points to a strong economic outlook as the Fed hikes costs to fuel higher prices.

Data on the US consumer price index (CPI) is due on Thursday, with economists polled by Reuters forecasting a decline in monthly and annual inflation for October to 0.5% and 6.5%, respectively. ‘One by one.

Many in the market believe the U.S. central bank could cut its lending rate if the data shows inflation, but others see it continuing “too high for long term” as Fed Chairman Jerome Powell indicated last week.

“Obviously, investors expect that the rate of inflation starts to rise, but if that doesn’t happen, I think that causes some other changes in the market, ” Aaron said.

Federal funds futures show the Fed’s target rate will rise to 5.096% next June, indicating policymakers will raise rates by 125 basis points from a range of 3.75%-4.0%. now.

Bitcoin, the largest cryptocurrency by market value, fell 13.42% to $16,061.00, the last low seen in November 2020.

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The euro was lower, down 0.59% to $1.0013, just off the $1.0096 hit overnight, its highest level since September 13.

The yen lost 0.45% against the dollar at 146.36, after falling overnight to 145.17, its lowest level against the Japanese currency this month.

The yield on the 10-year Treasury note was down 3.1 basis points to 4.097%.

Oil prices fell after industry data showed that US crude inventories rose more than expected and that in the context of a rebound in cases of COVID-19 and Chinese importers will hurt the fuel.

US crude futures fell $3.08 to settle at $85.83 a barrel and Brent futures were down $2.71 at $92.65.

Gold fell as a surge in the dollar pushed bullion prices to a more than one-month high.

US gold futures ended 0.1% lower at $1,713.70.

Reporting by Herbert Lash in New York (Additional work by Dhara Ranasinghe, Nell Mackenzie and Lucy Raitano in London, Ankur Banerjee in Singapore Editing by Alex Richardson and Matthew Lewis)

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