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Stock futures rise then fall – Mortgage rates fall – UK government announces biggest financial regulation overhaul in 30 years – Money managers see double-digit gains in 2023 – Senate to subpoena FTX’s Sam Bankman-Fried
On Friday, stock futures rose at the opening bell for the second consecutive day, with the Dow Jones Industrial Average climbing by 112 points or 0.3%, as S&P 500 futures rose by 0.5% and the technology-heavy Nasdaq 100 futures notched up 0.6%, CNBC reported. On Thursday, Wall Street gains snapped a five-day streak of losses.
But those early gains were reversed, with futures falling as data on producer prices brought hotter-than-expected inflation data coming ahead of next week’s Federal Reserve meeting, Yahoo Finance reported. As a result, the S&P 500, Dow, and Nasdaq futures were all down by about 0.4%.
The November read on producer prices showed a rise of 0.3% over the prior month on a headline basis and 0.4% on a “core” basis, which excludes food and energy. Economists were predicting an increase of 0.2% for each.
As of 8:42 AM EST, the benchmark 10-year US Treasury was up by +0.012 for a yield of 3.505%.
WTI crude oil was trading near $72.15 a barrel, up about 1%, following gasoline prices hitting a new low for the year on Thursday.
This week, for the fourth consecutive week in a row, the rate for a 30-year fixed-rate mortgage dropped, now averaging 6.3% for the week ending December 8, down from 6.49% a week earlier, according to Freddie Mac. But it is still more than double the rates last year. A year ago, the rate on a 30-year mortgage was 3.10%, CNN reported.
Mortgage applications decreased 2% the week ending Dec. 2 compared to the previous week, USA Today reported.
The UK government announced what it is describing as one of the biggest hauls of financial regulation in over three decades. The government says the package of over 30 reforms, dubbed the “Edinburgh reforms,” will “cut red tape” and “turbocharge growth,” BBC reported.
The government says the regulations have been specifically tailored to the needs and strengths of the post-Brexit UK economy. A review of banking rules that have forced banks to legally separate retail banking from riskier investment operations, which were introduced after the 2008 financial crisis, will be re-investigated. However, critics say the package risks forgetting the lessons of the financial crisis when some banks faced collapse and had to rely on public money to bail out financial institutions.
A survey of top money managers by Bloomberg found that some of the world’s biggest investors are predicting double-digit gains in 2023. If that prediction comes true, it would bring relief as global equities suffered their worst loss in 2022 cents 2008. In the survey, 71 percent of respondents expect equities to rise versus, and those forecasting gains expected an average 10 percent return.
Next week, the Senate Banking and House Financial Services committees are holding hearings on FTX’s collapse. The Senate committee said it will subpoena FTX’s Sam Bankman-Fried to appear if he does not testify voluntarily, according to a letter from its leaders issued on Wednesday, Coindesk reported. The house hearing is on December 13, and the Senate hearing is on December 14.
“FTX’s collapse has caused real financial harm to consumers, and effects have spilled over into other parts of the crypto industry,” the letter by the committee read, led by Senators Sherrod Brown (D-Ohio) and Pat Toomey (R-Pa.). “The American people need answers about Sam Bankman-Fried’s misconduct at FTX.”
