Global stock markets were steady on Monday as investors took few risks ahead of this week’s Federal Reserve meeting, which may yield clues to the direction of interest rates in coming months.
A surprise bid by Paramount for Warner Bros. Discovery brought the tech sector to life, however, as it could trigger a bidding war against Netflix.
A monetary easing at Wednesday’s Fed meeting is fully priced into stock prices, analysts said, but investors will scour the central bank’s statement and news conference for insights into how many rate reductions might be on the cards next year, against a backdrop of stubborn inflationary pressures.
“A rate cut (Wednesday) when inflation remains well above target, should be a one-off,” predicted Kathleen Brooks, research director at traders XTB.
The “market is underpricing the uncertainty in the outlook for the Fed next year, which could lead to a big market reaction if the Fed does not have the appetite for more cuts”, she added.
Frankfurt outperformed other European markets after German industrial production unexpectedly jumped in October — another sign that Europe’s crisis-wracked top economy may be turning a corner.
In New York, Warner Bros Discovery shares jumped by over seven percent on the Nasdaq after Paramount countered last week’s Netflix bid for the company with an all-cash offer worth $108.4 billion.
Netflix stock slumped more than two percent, while Paramount rose by close to two percent.
Analysts had predicted last week that a Netflix/Warner linkup could amount to a major threat to Paramount’s streaming business.
– Key figures at around 1445 GMT –
New York – Dow: DOWN 0.3 percent at 47,828.15
London – FTSE 100: DOWN 0.3 percent at 9,642.45
Paris – CAC 40: DOWN 0.2 percent at 8,098.90
Frankfurt – DAX: UP 0.3 percent at 24,089.49
Tokyo – Nikkei 225: UP 0.2 percent at 50,581.94 (close)
Hong Kong – Hang Seng Index: DOWN 1.2 percent at 25,765.36 (close)
Shanghai – Composite: UP 0.5 percent at 3,924.08 (close)
New York – Dow: UP 0.2 percent at 47,954.99 (close)
Euro/dollar: UP at $1.1649 from $1.1642 on Friday
Pound/dollar: DOWN at $1.3326 from $1.3329
Dollar/yen: UP at 155.70 yen from 155.32 yen
Euro/pound: UP at 87.42 pence from 87.35 pence
Brent North Sea Crude: DOWN 1.5 percent at $62.79 per barrel
West Texas Intermediate: DOWN 1.6 percent at $59.15 per barrel
