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International Market Update
- European stocks closed mixed on Monday as investors reacted to news that U.S. Federal Reserve Chairman Jerome Powell
Federal Reserve Chairman Jerome Powell secured a second term and tracked the recent coronavirus wave. The pan-European Stoxx 600 closed provisionally unchanged, with telecom stocks up 1.8% to lead the gains, while travel and leisure stocks slumped 1.3% on concerns about a return of covid lockdowns in some countries. European investors will be keeping an eye on the spread of Covid-19 across the continent after Germany and Austria reimposed strict blocking measures last week.
- U.S. stocks fell on Monday afternoon after President Joe Biden announced the Biden announced that he would nominate Chairman Jerome Powell to continue leading the Federal Reserve Reserve will continue, rather than nominate Fed Governor Lael Brainard to the post. Bank stocks and Treasury yields rose after the White House announced the Fed decision. Shares of JPMorgan rose 2.1%, while Morgan Stanley gained nearly 2.5%. The rise in interest rates appeared to hurt some tech stocks, whose future returns are less attractive to investors when yields are higher.
- Asian stock markets are trading mostly weaker this morning, following negative cues from Wall Treasury yields and the U.S. dollar rose on concerns about a faster pace of monetary tightening after President Joe Biden announced his intention to nominate Jerome Powell for a second term as Federal Reserve chairman. Among major Australian miners, BHP Group is up more than 4%, OZ Minerals is up almost 1% and Rio Tinto is gaining almost 4%.
In International news
Zoom beats estimates, though revenue growth will slow after pandemic
Zoom reported better-than-expected quarterly profit on Monday, but warned investors that revenue growth at the video chat company will slow as the pandemic comes to an end. Revenue rose 35% in the quarter ended Oct. 31 from a year earlier, slowing from 54% growth in the previous period. Net income rose 71% to $340.3 million, according to the company. For the fourth quarter, Zoom forecast adjusted earnings of $1.06 to $1.07 per share on revenue of $1.051 billion to $1.053 billion, up 19%. Analysts polled by Refinitiv had expected adjusted earnings of $1.05 per share and revenue of $1.02 billion. Zoom shares have risen rapidly over the past year as the company has transformed itself from a competitor in a narrow category of enterprise software to a culture factory.
White House: US will not lock down Covid while European countries impose restrictions
The Biden administration has no plans to contain future Covid 19 outbreaks through a nationwide lockdown, White House Coronavirus Response Coordinator Jeff Zients said at a briefing Monday. Zients’ remarks come at a time when Austria is undertaking its fourth nationwide lockdown and the Netherlands is implementing a partial lockdown after the covid wave ravaged Europe in recent weeks. Instead of sealing off the U.S., Zients said the federal government will rely on vaccines and therapeutic treatments to keep the country running in the event of another devastating Covid wave. “We can contain the spread of the virus without having to cripple our economy in any way,” Zients said.