By Peter Nurse
Investing.com — The fallout from the collapse of crypto exchange FTX continues to be felt, while positive news for U.S. retail stocks should lead to a higher open on Wall Street. Nancy Pelosi has announced she is stepping down as a senior member of the Democratic Party in the House of Representatives, ending an era. President Joe Biden signals a thaw in relations with Saudi Arabia as businesses look to the FIFA World Cup for a sales rebound. Here’s what you need to know in financial markets on Friday, November 18.
1. FTX fallout continues
The collapse of cryptocurrency exchange FTX continues to reverberate, as Genesis Block, one of Hong Kong’s leading cryptocurrency retail service providers, announced on Friday that it was ceasing trading. activities.
“We stopped trading because we don’t know which counterparties would fail next, so we prefer to close all our positions to regain some of our liquidity,” chief executive Wincent Hung said, according to Reuters.
This follows FTX’s filing for bankruptcy last week, at which time the company’s new CEO, John J. Ray III, said the company’s situation involved a “complete failure of corporate controls.”
It is now likely that there will be an unsightly scramble for FTX assets that still exist, with the Bahamian Securities Commission ordering the transfer of all FTX digital assets to a commission-owned digital wallet “for safekeeping”.
There has also already been a lawsuit filed in Miami by FTX account holders alleging deceptive marketing practices, and it’s likely the first of many to come given the billions of dollars in losses on the market. cryptocurrency exchange.
2. End of the Pelosi era
The Democrats’ loss of control of the House of Representatives following the US midterm elections also marks the end of Nancy Pelosi’s long career as Congress leader.
Pelosi announced during a speech Thursday that she would step down as House leader but remain in Congress, representing San Francisco as she has done since 1987.
She was the tallest and most powerful elected woman in US history until Kamala Harris became vice president in January 2021, having served twice as president, first from 2007 to 2011, then to have resumed the position in 2019.
President Joe Biden, in a statement, called Pelosi “the most important speaker in the House of Representatives in our history.”
She will be replaced as Speaker of the House by Republican Kevin McCarthy, while Hakeem Jeffries is expected to take on the role of House Minority Leader, becoming the first black person in the position.
3. Stocks should rise; The gap exceeds quarterly expectations
U.S. stock markets are expected to open higher on Friday as investors assimilate some positive retail earnings as well as hawkish comments from a number of Federal Reserve speakers.
As of 6:20 a.m. ET (11:20 a.m. GMT), they were up 145 points or 0.4%, while they were up 0.6% and up 0.8%.
Retail chain Gap (NYSE:) stock is expected to post strong premarket gains after quarterly sales and profits after Thursday’s close, helped by steady consumer demand for its evening wear and dresses. well off.
Rival Macy’s (NYSE:) also reported strong demand for high-end apparel ahead of the holiday season earlier in the week.
It wasn’t all good news, however, as online retail giant Amazon (NASDAQ:) said on Thursday evening that it would extend into 2023, with reports suggesting the company is still aiming approximately 10,000 job cuts.
Economic data is centered around , while the Boston Fed President is due to speak during the session.
4. Thawing of U.S.-Saudi Relations
In a sign of a possible thaw in relations between the United States and Saudi Arabia, the Biden administration ruled on Thursday that Saudi Crown Prince Mohammed bin Salman enjoys immunity from trial for the murder of Jamal Khashoggi.
President Joe Biden had previously vowed to make Saudi Arabia a “pariah” on its human rights record, making it clear that the 2018 murder was “of vital importance to me and the United States.” United”.
The decision by the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, to cut crude production to support oil prices last month, a decision that drew strong criticism from Biden, has added freeze to the relationship.
Oil prices have fallen this week on fears that rising COVID cases in China, the world’s biggest crude importer, will affect the recovery in demand. However, they remain at elevated levels, adding to global inflationary pressures.
As of 6:20 a.m. ET, futures were trading down 0.2% at $81.50 a barrel, down more than 8% since the start of the week, while the contract fell 0 .5% to $89.33, around 7% lower so far this week.
5. Companies looking for World Cup rebound
The FIFA World Cup kicks off this weekend, and many companies consider the world’s most watched and followed sporting event central to their fortunes this quarter.
Gambling businesses, which are seeing a decline in online gaming from COVID peaks, are now facing the challenges of a cost of living crisis as customers seek to cut non-essential spending.
Adidas (OTC:), which is the official supplier to the FIFA World Cup, cut its outlook for 2022 earlier this month but will be looking for a boost thanks to the massive exposure that such a tournament brought.
Similarly, FIFA sponsor Budweiser, owned by Anheuser-Busch InBev (NYSE:), the world’s largest brewer, is hoping for an increase in sales. That said, FIFA announced that fans would not be allowed to buy alcohol in World Cup stadiums in a dramatic reversal just two days before the start of the football tournament.
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