US Markets

Stock futures were down slightly overnight as it remains unclear which political party will win control of Congress following the midterm elections.

• In the House of Representatives, as of 7:30 am ET, 199 seats had been called for the Republicans and 172 for the Democrats. According to an NBC projection, Republicans are likely to finish with 220 seats, which would give them a majority by three seats.
• In the Senate, as of 7:30 am ET, the GOP had 47 seats, and the Democrats had 46 seats.
• Meta was up overnight after announcing plans to lay off 11,000 workers in a cost-cutting measure.
• Disney lost nearly 10% overnight after reporting lower-than-expected earnings.
  The current 10 Year U.S. Treasury yield is set at 4.12370%

Canadian Markets

The Bank of Canada has released a new survey on the use of Bitcoin in the country.

• Bitcoin usage in Canada rose significantly during the pandemic, jumping from 5% of Canadians owning Bitcoin in 2020 to 13% in 2021.
• The average amount of Bitcoin held by Canadians was $500, and 70% of all Bitcoin holders had less than $5,000 in cryptocurrency.
• Many Bitcoin holders have suffered losses: 25% reported losing money due to price crashes, 11% losing access to their wallets, 9% having transaction problems, and 7% having their coins stolen.

European Markets

Stocks in Europe were up on Tuesday but dropped on Wednesday morning as investors were awaiting the results of the midterm elections in the U.S.

• The Stoxx 600 rose 0.75% yesterday after losing as much as 0.5% earlier in the session.
• Tech stocks gained 3.1% on the day, leading markets. Oil and gas was the worst-performing industry, down 1.6%.
• Investors are also awaiting the release of U.S. consumer price data on Thursday.

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Asian Markets

Stocks in Asia were mixed on Tuesday and Wednesday morning as they reacted to key economic data from China and the uncertainty surrounding the results of the U.S. midterm results.

• China’s Producer Price Index fell 1.3% in October, which was better than the 1.5% drop expected by investors.
• The country’s Consumer Price Index rose 2.1% in October from a year earlier, down from the 2.8% inflation rate recorded in September.
• Tech stocks saw significant losses. Xpeng plunged 7.2%, BYD dived 6%, Nio lost 5.5%, Tencent fell 4.48%, Meituan dropped 4.5%, and Alibaba slipped 2.61%.

Commodities

Oil prices were down on Tuesday and Wednesday morning as China reported an increase in COVID-19 cases.

• Both Brent and U.S. West Texas Intermediate lost 3% yesterday and another 1% in Asian trading hours this morning.
• U.S. crude oil inventories rose by 5.6 million barrels last week, which was more than the 1.4 million barrel increase expected by analysts.
• U.S. gasoline inventories gained 2.6 million barrels, versus the 1.1 million decline expected by analysts.

Currency Exchange Rates

The U.S. Dollar was down on Tuesday as the Euro continued to strengthen due to rising German bond yields.

• CPI data due tomorrow will impact the U.S. Dollar as it will likely influence future Fed policy.
• The Japanese government has now spent $43.37B trying to stabilize the value of the Yen.
• The Chinese Yuan had its largest gain since the start of the pandemic, finishing the day at 7.26 Yuan per U.S. Dollar.

Cryptocurrency

The crypto markets recorded significant losses due to the uncertainty surrounding the liquidity of FTX and the announcement that Binance had agreed to acquire its largest competitor.

• Binance, the world’s largest cryptocurrency exchange, agreed to acquire FTX for an undisclosed sum. Binance founder Changpen Zhao said his company will help cover FTX’s liquidity crunch.
• 20,000 Bitcoins were removed from the FTX platform as traders feared their assets could be at risk due to the liquidity issues.
• Coinbase was exempt from the panic as the firm didn’t have any exposure to the FTT token (FTX’s native token), whose decline in price was responsible for the panic in markets.
• JPMorgan reports that capital flow into cryptocurrency markets has dropped by two-thirds from last year.

Good trading,
Chris Svorcik