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Stocks check reality from earnings, central banks focus on Reuters

© Reuters. File photo: April 18, 2016, a man looking at a stock market bulletin board outside a securities company in Tokyo. REUTERS / Toru Hanai

Hideyuki Sano

Tokyo (Reuters)-Clearly reminded of a stagnation in the supply chain of corporate earnings reports, global equities eased from record peaks and investors may consider central banks tightening monetary policy sooner than expected investigated.

ACWI, MSCI’s global equities gauge, fell 0.05% () in early Thursday trading, leading losses with a 1.1% drop.

Mainland China stocks fell 0.2%, while MSCI’s widest non-Japanese Asia Pacific stocks fell 0.1%.

On Wall Street, there was a 0.51% loss from Tuesday’s record-breaking hit, but thanks to strong revenues from Microsoft (NASDAQ :) and Google’s parent Alphabet (NASDAQ :), Nasdaq hasn’t changed much. ..

Still, the revenue report also shows the largest manufacturers in the United States, including General Motors (NYSE :). General Electric (NYSE :), 3M and Boeing (NYSE :) are facing logistics problems and rising costs due to global supply bottlenecks that are likely to continue until next year.

GM lost 5.4% after Wednesday’s earnings announcement.

In Asia, Japanese robot maker FANUC (OTC :) plunged 8.5%, and IT conglomerate Fujitsu fell 9.8% as the chip shortage had more impact than expected.

“In the market, the impact of a chip shortage was expected to diminish by the end of the year, but if the problem continues next year, investors will certainly lose confidence in their outlook,” said Masayuki Murata, general manager. .. Overview of balanced portfolio investment in Sumitomo Life Insurance.

Investors are paying attention to whether global central banks are trying to reduce generous pandemic stimuli more quickly, as global supply turmoil fuels inflation concerns.

The Bank of Canada suggested that quantitative easing could be completed earlier than expected and that in April 2022 interest rates could be raised faster than previously thought.

Bank of China’s actions have fueled expectations that the Federal Reserve Board may also move faster towards rate hikes, with federal funds rate futures priced in two rate hikes by the end of 2022.

The Federal Reserve Board is almost unanimously expected to announce a gradual reduction in bond purchases at its policy meeting next week.

Two-year Treasury yields rose to 0.528%, ending at 0.501%. It was about 0.26% at the beginning of October.

In contrast, long-term yields have declined partially as monetary tightening policies are likely to curb future inflation.

Yields on 10-year US banknotes have fallen to 1.545%, compared to the five-month peak of 1.705% mentioned a week ago.

The plunge in gilt yields after the UK government lowered borrowing forecasts more than expected also helped lower global bond yields.

The 10-year UK bond yield fell 12.8 basis points on Wednesday, the largest decline since March 2020 to 0.982%.

In the foreign exchange market, the Canadian dollar remained strong at 1.2362 Canadian dollars per dollar, following the surprise of the BoC.

Other major currencies were put on hold prior to policy announcements by the Bank of Japan and the European Central Bank, but no major changes are expected.

The yen was 113.73 / dollar, while the euro changed hands at $ 1.1600, below the four-year low of 114.695, which was mentioned last week.

Oil prices fell after oil stockpiling increased more than expected, despite fuel inventories declining and the country’s largest storage hub tanks becoming more empty. [O/R]

Unexpected rises in US oil inventories have caused some investors to unload long positions after strong rises in recent weeks have hit both US and US oil benchmarks for the first time in years. It was an opportunity to do it.

Brent fell 1.8% to $ 83.07 a barrel, below Monday’s seven-year high of $ 86.70, and US crude fell 1.7% to Monday’s peak of $ 85.41 per barrel. It was below.

Stocks check reality from earnings, central banks focus on Reuters Stocks check reality from earnings, central banks focus on Reuters

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