Traders on the NYSE floor, June 29, 2022
Source: New York Stock Exchange.
Here are the most important news investors need to start their trading day:
1. Stock drop continues
American investors returned after a three-day Fourth of July holiday to find stock futures fell again. Last week the market ended its worst first half in more than 50 years, but the second half of the year doesn’t look so rosy either, at least not in the early days. Reporting season is just around the corner as well, which could mean more downtime ahead as companies grapple with the impact of inflation on their bottom line.
2. A look at China
Chinese Vice Premier Liu He represented his country at the signing of a trade agreement with the United States in January 2020.
Saul Loeb | AFP | Getty Images
US Treasury Secretary Janet Yellen held virtual talks with Chinese Vice Premier Liu He on Tuesday. to address macroeconomic conditions, including US sanctions and tariffs on China. President Joe Biden has suggested that the US could cut some Trump-era tariffs on Chinese goods. Officials have also spoken of ongoing supply chain issues, some of which involve parts of China that have been on lockdown due to the pandemic. Several Chinese cities and regions have tightened Covid restrictions in recent days, indicating the economic impact of the disease on the world’s second-largest economy is far from being addressed.
3. The euro hit a two-decade low
Christine Lagarde, President of the European Central Bank. The central bank scheduled an emergency meeting to decide whether to raise bond yields.
John Tees | Afp | Getty Images
There are no signs of relief in the eurozone. Russia has made significant gains in Ukraine, and the war will rage on for some more time, which means that European consumers will continue to feel the crunch from higher commodity and energy prices. Investor confidence in the eurozone has also fallen to levels last seen at the start of the Covid pandemic. All this has led to historical weakness for the euro, which fell to a 20-year low against the dollar on Tuesday. This month, the European Central Bank intends to raise rates for the first time in 11 years.
4. Compressing Russian gas
A Uniper Energy Storage employee inspects the onshore natural gas storage facilities at Uniper Energy Storage in Bierwang, southern Germany, June 10, 2022.
Lennart Preiss | AFP | Getty Images
Some of Europe’s biggest fears about energy are making themselves felt as countries work to build up natural gas reserves. As Russia prepares to close a major gas pipeline to Germany for maintenance, officials are concerned Vladimir Putin’s government may keep the taps closed for longer than between 11 and 21 July. Some believe Russia could cut off Europe forever as countries there continue to support Ukraine’s defense. “We cannot rule out the possibility that gas transportation will not be resumed after this for political reasons,” the head of Germany’s energy regulator told CNBC.
5. Another crypto victim
The fall in cryptocurrency prices and the beginning of a new so-called “crypto winter” have put many companies in the industry in front of a liquidity crisis.
Artur Vidak | Nurfoto | Getty Images
The crypto-winter is getting more and more severe. Vauld, a crypto lender backed by Peter Thiel and Coinbase, withdrawals, trading and deposits on Monday are suspended. The Singapore-based company also said it was considering restructuring options. Wold also said he was in talks with potential investors less than three weeks after its CEO said the company was doing fine despite the discord in the crypto space. The news comes as bitcoin and crypto firms are failing amid a wider rout in the stock and bond markets.
— Evelyn Cheng of CNBC, Elliot Smith and Arjun Harpal contributed to this report.
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