# World stocks slip as markets await U.S. midterms outcome
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-09
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Stocks Slide as U.S. Midterm Results Awaited
Meta Description: World stocks fall as investors await U.S. midterm results and key CPI data. Dollar up, Bitcoin down. Split Congress could mean gridlock for U.S. policy.
URL: https://financedigest.com/world-stocks-slip-as-markets-await-u-s-midterms-outcomehtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-09t023743z1lynxmpeia803krtroptp4global-markets-1736814890209-compressed.jpg)

By Herbert Lash

NEW YORK (Reuters) – World stocks slid below recent seven-week highs and the dollar rose on Wednesday as investors awaited both the results of the U.S. midterm elections and key data on consumer [prices that could alter the Federal Reserve’s](https://www.financedigest.com/oil-prices-dip-on-u-s-crude-reserve-release-inflation-pressure.html "Oil prices dip on U.S. crude reserve release, inflation pressure") policy on interest rates.

Bitcoin, the biggest cryptocurrency by market value, fell 7.09% to $17,235.00 amid [concerns about the stability of the sector after a “liquidity crunch” forced major exchange FTX into a deal](https://www.financedigest.com/nato-deal-with-turkey-greeted-with-caution-and-concern-in-sweden.html "NATO deal with Turkey greeted with caution and concern in Sweden") with rival Binance.

[Stocks in Europe and on Wall Street](https://www.financedigest.com/wall-street-stocks-power-higher-as-treasury-yields-and-dollar-ease.html "Wall Street stocks power higher as Treasury yields and dollar ease") were lower as a still unclear outcome in the U.S. elections, with neither the Republicans or Democrats likely to control both chambers of Congress, muddied the [outlook for issues](https://www.financedigest.com/ford-posts-lower-profit-issues-downbeat-outlook-shares-drop.html "Ford posts lower profit, issues downbeat outlook; shares drop") such as fiscal spending and regulation.

“The market is going to get what it wants: it’s going to get divided government. It means gridlock is the agenda item for the [next two years,”](https://www.financedigest.com/eu-could-face-gas-shortage-next-year-iea-warns.html "EU could face gas shortage next year, IEA warns") said Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan.

It’s not going to seriously alter spending, but it’s also going to block any material [increases in spending,”](https://www.financedigest.com/increasingly-flexible-working-patterns-drive-up-it-and-technology-spend-across-europe.html "Increasingly Flexible working patterns drive up IT and technology SPEND across europe") he said.

Stock [markets have tended to perform better under a split government when a Democrat is in the White House](https://www.financedigest.com/uk-housing-market-weakness-continues-improvement-on-the-horizon-rics.html "UK housing market weakness continues, improvement on the horizon – RICS").

[Average annual](https://www.financedigest.com/average-annual-uk-food-bill-set-to-rise-454-pounds-as-inflation-soars.html "Average annual UK food bill set to rise 454 pounds as inflation soars") S&P 500 returns have been 14% in a split Congress and 13% in a Republican-controlled Congress under a Democratic president, according to data since 1932 analyzed by RBC Capital Markets. That compares with 10% when Democrats controlled both the presidency and Congress.

[Asian shares](https://www.financedigest.com/asian-shares-muted-as-investors-fret-over-china-reopening.html "Asian shares muted as investors fret over China reopening") overnight edged up as the election results rolled in, but MSCI’s all-country world index shed 0.82% and the pan-European STOXX 600 index lost 0.20%.

On [Wall Street](https://www.financedigest.com/weary-wall-street-cheers-improved-consumer-confidence.html "Weary Wall Street cheers improved consumer confidence"), the Dow Jones Industrial Average fell 0.85%, the S&P 500 slid 0.90% and the Nasdaq Composite dropped 1.17%.

GRAPHIC: Post-midterm perfection for U.S. stocks https://graphics.reuters.com/USA-STOCKS/MIDTERMS/gdpzqrdoqvw/chart.png

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/11/480.jpg)

Meta Platforms Inc gained 6.73% after the Facebook parent said it would cut 13% of its workforce, a decision to reduce spending that [investors cheered](https://www.financedigest.com/despite-the-headwinds-investors-have-important-reasons-to-be-cheerful.html "DESPITE THE HEADWINDS, INVESTORS HAVE IMPORTANT REASONS TO BE CHEERFUL"). But a weak advertising [market for Meta also points to the difficult economic outlook as the Fed hikes rates to tame stubbornly high inflation](https://www.financedigest.com/hungarys-booming-wedding-market-doused-by-soaring-inflation.html "Hungary’s booming wedding market doused by soaring inflation").

Data on the U.S. [consumer price](https://www.financedigest.com/analysis-to-raise-prices-or-not-consumer-goods-makers-weigh-bets-on-buyer-strength.html "Analysis-To raise prices or not? Consumer goods makers weigh bets on buyer strength") index (CPI) is due on Thursday, with economists polled by Reuters forecasting a decline in both the monthly and yearly core numbers for October to 0.5% and 6.5%, respectively.

Some in the market have speculated the U.S. central bank can reduce its target lending rate if [data shows inflation](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") ebbing, but others see it moving “higher for longer” in Fed parlance.

Florian Ielpo, a portfolio manager from Lombard Odier Asset Management, said the [inflation data](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") was a larger concern for markets than the U.S. elections.

The perspective of that [inflation number](https://www.financedigest.com/uks-december-shopper-numbers-defy-inflation-and-rail-strikes-hit.html "UK’s December shopper numbers defy inflation and rail strikes hit") overshadows everything else, inclusive of the U.S. political situation. We need [lower inflation](https://www.financedigest.com/spains-inflation-to-be-lower-this-year-than-in-2022-minister.html "Spain’s inflation to be lower this year than in 2022 -minister") to keep our eyes off the Fed and start looking elsewhere,” said Ielpo, who heads the macro and multi asset departments for the Swiss asset manager.

Federal fund [futures show the Fed’s](https://www.financedigest.com/us-stock-futures-bonds-rally-as-markets-flirt-with-fed-pause.html "US stock futures, bonds rally as markets flirt with Fed pause") target rate will peak at 5.111% in June 2023, which indicates policymakers must hike rates by more than 125 basis points from their current 3.75%-4.0% range.

U.S. [money markets](https://www.financedigest.com/explainer-why-european-money-market-funds-inflows-are-lagging-behind-the-u-s-torrent.html "Explainer-Why European money market funds inflows are lagging behind the U.S. torrent?") price in a 50 basis point Fed interest rate hike in December and a roughly 33% chance of a bigger 75-bps increase.

The euro was lower, down 0.56% to $1.0016, just off the $1.0096 hit overnight, its highest since Sept. 13.

The yen weakened 0.45% [versus the dollar](https://www.financedigest.com/russian-rouble-nears-4-week-high-versus-dollar.html "Russian rouble nears 4-week high versus dollar") at 146.35, after weakening overnight to 145.17, its lowest level against the Japanese currency this month.

The [yield on 10-year Treasury](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") notes was down 0.2 basis points to 4.126%.

U.S. crude fell 1.98% to $87.15 per barrel and Brent was at $93.63, down 1.81% on the day.

(Reporting by Herbert Lash, additional eporting by Dhara Ranasinghe, Nell Mackenzie and Lucy Raitano in London, Ankur Banerjee in Singapore; Editing by Toby Chopra, Bernadette Baum and Deepa Babington)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---