Archives of “November 3, 2021” day

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RED ALERT ::::: China coronavirus – around half the flights to and from Beijing were cancelled Tuesday

  
Analysis, COVID-19

‘Zero Covid’ policy persists in China – this report via CNBC on the outbreak in Beijing:

  • About half the flights to and from Beijing city’s two airports were cancelled Tuesday,
  • Local authorities are on high alert after a handful of locally transmitted coronavirus cases over the weekend indicated the latest spike in cases might be spreading beyond just a few regions.
  • Beijing’s health commission announced Monday that residents who had left the city for business trips or leisure trips to areas with confirmed cases should “postpone” returning
The report is here for more.
The mid-year outbreak of the virus in China resulted in widespread disruption to the economy, if the ‘zero’ policy can stamp out the spread quickly these will be limited this time around but the risk is further spread and tightening of movement again.

More on China urging its people to stockpile food

  
  Analysis
Long story short on this, as posted yesterday, is
  • China’s Commerce Ministry issued a directive telling families to stockpile essentials
  • supply chain are hampered by heavy flooding and COVID-19 lockdowns
The wider media have now picked up on the story with some fevered speculation that it even pre-empts an invasion of Taiwan! (A far-fetched worry that one).
This is a worrying development in China. The concern over supply chains is real, and recent history has shown Chinese authorities have responded in a ham-fisted way to a recent example, the energy crisis. Earlier in the year Chin banned imports of Australian coal and authorities have stood idly by as the price of coal skyrocketed, forcing electricity producers to scale back on purchases (when they could source coal at all) and enforce rolling blackouts impacting both the domestic and industrial sectors. (There are other factors in play but the spiteful moves on coal imports are a biggie. Let’s hope China manages this latest disruption or winter is going to be long and ugly).
Post on this from yesterday the early heads up on a fearful development in China:

3 reasons why the Fed is likely interpreted as hawkish – BofA

  
  Analysis

Fed strategy from Bank of America

Fed strategy from Bank of America

Bank of America Global Research discusses its expectations for tomorrow’s FOMC policy meeting.

“The Fed is likely to announce tapering at the upcoming November FOMC meeting, reducing TSY purchases by $10bn and MBS by $5bn, while noting asset purchases are not on a pre-set course. We think Chair Powell will likely separate taper and rate hikes as two distinct decisions; the latter will depend on realized and future inflation at 2% or above coupled with achievement of maximum employment. Rate hikes are “a ways off” but Chair Powell is unlikely to push back on the market timing of rate hikes, which have been brought forward materially ,” BofA notes.

“We see risks Fed comments are interpreted as hawkish due to (1) recognition of upside inflation risks, (2) faster taper pace, and (3) potential future balance sheet reduction. This could sustain or extend the recent UST curve flattening trend. Similarly, risks to the US dollar are skewed to the upside around this week’s Fed meeting, in our view,” BofA adds.

Dow, S&P, NASDAQ close at record highs. Russell 2000 trades to a new intraday all-time high

  
Analysis, US Market

Russell 2000 sets the first intraday high since March

A quadruple record close for the major indices. In addition to the Dow S&P and NASDAQ posting a record closes, the Russell 2000 index also joined the party with its own new all-time high.

  • NASDAQ recorded its fourth straight record close
  • Dow industrial average closed at a record level for its third consecutive day.
  • NASDAQ closed at a record level for the 40th time
  • Dow industrial average closed at a record level for the 41th time
  • S&P index closed at a record level for the 61st time
  • NASDAQ is up for the seventh straight day
  • Winning sectors included Materials rose 1.1% real estate rose 0.94%, technology rose 0.82% and consumer staples rose 0.69%
  • Losing sectors included energy which fell -1.01%, discretionary fell -0.62%

The gains come despite the expectations at the Federal Reserve will start to taper process when they announce their decision tomorrow at 2 PM ET. The expectations are for $15 billion. That would put the Fed on schedule for finishing the taper by midyear 2022. There is a possibility that they speed up the taper process could be a problem for the stock market if that should happen.

The final numbers are showing:
  • Dow industrial average +138.79 points or 0.39% at 36052.63
  • S&P index rose 17.04 points or 0.37% at 4630.71
  • NASDAQ index rose 53.69 points or 0.34% at 15649.60
  • the Russell 2000 rose 3.74 points or 0.16% at 2361.86
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