Investor Relations Week: Crypto Chaos, London Market Drop, EU Stocks React to Polish Missile Scare
– As crypto companies falter, more and more retail money is trapped. said Bloomberg (paywall) in a report. Following the collapse of FTX, the contagion is spreading through the industry. Crypto lender BlockFi, which has suspended customer withdrawals, is reportedly preparing to file for bankruptcy. The flood of investors who poured money into crypto as prices soared last year are facing an existential crisis as the implosion of FTX reverberates through the industry. Recovering money from struggling crypto companies is a long and complicated process, with insolvency proceedings taking months or even years to resolve. And customers are increasingly concerned about when – if at all – they will be able to access their money.
– Institutional investors, however, appeared to be taking advantage of the “extreme price weakness” seen in the cryptocurrency space following the collapse of FTX and its sister company Alameda Research. It depends cryptoglobe.com, reporting on research into digital asset fund flows from CoinShares. According to the report, cryptocurrency investment products saw their biggest inflows in 14 weeks last week, totaling $42 million. The inflows, the company wrote, began later in the week after crypto prices collapsed due to FTX’s liquidity crunch.
– Stocks fell in the United States on Thursday as interest rates jumped, with Fed officials signaling that interest rate hikes to curb inflation are far from over, according to CNBC. The Dow Jones Industrial Average fell 0.7%, the S&P 500 fell 1.2% and the Nasdaq Composite fell 1.4%. St. Louis Fed President James Bullard said in a speech Thursday that “the policy rate is not yet in a zone that could be considered tight enough.” The change in monetary policy stance appears to have had only limited effects on observed inflation, but market prices suggest disinflation is expected in 2023.”
– Meanwhile, the shared control of the U.S. Congress after the midterm elections could provide a tailwind for stocks at the end of a bruising year, noted Reuters. Citing investors, however, he added that inflation and the Fed should remain the main drivers of the market. “For the economy and the markets, it’s policy that determines outcomes, rather than politics,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. A divided government “makes major political changes unlikely, and this political stability tends to reassure investors.”
– On the other side of the Atlantic, London has lost its position as the most valued European stock market, reports the BBC, citing data from Bloomberg. The weakness of the pound, recession fears in the United Kingdom and the surge in sales of French manufacturers of luxury goods are believed to be behind this change. This is the first time that Paris has overtaken London since records began in 2003.
– Britain’s economy is now in recession, Chancellor Jeremy Hunt said in his autumn statement on Thursday. Government extends windfall tax on oil and gas companies operating in the North Sea; the levy was introduced in May, noted the BBC, but will increase to 35% from January 2023 and remain in place for five years. Reporting the same news, voice of energy said power generators and oil companies in the North Sea would be hit by a one-off £54 billion ($64.4 billion) tax. Industry sources reacting to the announcement said: ‘It threatens to drive investment out of the UK altogether.
– In ESG-related news, financial market participants want more regulation and better supervision to help curb exaggerated ESG claims, according to Bloomberg. Its survey of ESG issues found that 53% of Bloomberg Terminal’s 550 users want more rules to help them address environmental issues. Europeans were more supportive of additional regulations than Americans, while both regions prioritized green issues over social or governance issues.
– The head of Canada’s $400 billion pension fund has said he’s ready to cut ties with companies that haven’t committed to meeting their net-zero goals, according to Yahoo! New (via Bloomberg). While the Canada Pension Plan Investment Board doesn’t think divestment is the right way to go, it will if other efforts fail, CEO John Graham told a Bloomberg panel. New Economy Forum in Singapore. The Toronto-based pension fund is one of the world’s largest institutional investors in private equity, with billions invested directly and through funds. The company said it would consider voting against all directors of companies where there are oversight failures related to climate change, gender diversity on the board and weak corporate governance.
– European markets opened lower on Wednesday after an explosion in a Polish border village killed two people, the report reported. evening standard. The cause of the explosion was initially unclear, but as the evening progressed, evidence in photos from the site suggested the event could have been caused by an air defense missile, potentially launched by Ukraine. MarketScreener reported via Reuters that Russian markets opened on Thursday as fears of a NATO escalation faded. Russian stocks saw volatile trading earlier in the week as the West rushed to investigate the cause of the missile impact, with NATO holding an emergency meeting. But the Kremlin praised Washington’s “restrained” response to the incident and Russian markets quickly recouped their initial losses.
– AFP’s Digital Journal reports earlier this week, Chinese e-commerce giant Alibaba reported a third-quarter loss of 20.6 billion yuan ($2.89 billion) as the company grappled with an economic slowdown and a crackdown anti-monopoly. The heavy net loss attributable to common shareholders was primarily due to a “decline in market prices of our equity investments in publicly traded companies,” among other factors, the company said in a statement. Alibaba’s performance is widely seen as an indicator of Chinese consumer sentiment, given its market dominance.