Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Early Morning Call: Nasdaq Composite hard-hit as Binance/FTX deal collapses

Markets are being shaken by the collapse of the Binance/FTX deal, with tech stocks among the worst performers.

Equity market overview

APAC equity markets fell overnight, following the lead set by US indices yesterday.

Tech stocks are among the worst performers in both regions. The Nasdaq Composite ended 2.48% lower, and Hong Kong’s Hang Seng lead the losses in Asia.

Markets are being shaken by the collapse of the Binance/FTX deal. Yesterday the WSJ said that Binance was interested in merging with another top crypto exchange, FTX, then reports said Binance was walking away.

Binance chief executive, Changpeng Zhao, said the near collapse of FTX has "severely shaken" confidence in the crypto industry and will trigger tougher scrutiny by regulators. FTX CEO, Sam Bankman-Fried, told employees he was exploring all options for his firm, saying his goals were to protect customers and to provide any help he could for staff and investors. He also told investors that FTX received numerous withdrawal requests from customers and needed funding of up to $8 billion.

Cryptocurrencies bounced back this morning. Yesterday’s sell-off took Bitcoin to a new two-year low.

Forex

The US dollar meanwhile, steadied after mid-term election results.

Currency traders are now waiting for inflation data. Consumer price index (CPI) is expected to rise by 8% in October year-on-year (YoY), after 8.2% the previous month. Core CPI is forecast to increase by 6.5%, after 6.6% on September.

Weekly jobless claims should report 220,000 new claimants.

Earnings

Elsewhere on the equity market, AstraZeneca raised its full-year (FY) earnings forecast after earnings and revenue beat expectations in the third quarter (Q3).

Former GSK consumer health arm Haleon also raised its sales growth forecast after posting a 16.1% jump in revenue in the third quarter.

Elsewhere in Europe, German insurer Allianz posted a better-than-expected 17% rise in third quarter net profit yesterday evening. Revenue however missed expectations. It came in €34.8bn, while analysts had forecast €37nn. In terms of outlook, Allianz sees its 2022 operating profit in the upper half of its previously stated range of €12.4bn to €14.4bn.

Separately, the company announced a €1 billion share buyback programme, which would start in the middle of November and conclude by the end of next year at the latest.

Deutsche Telekom reported an 80% rise in adjusted net profit to €2.4bn. The telecoms operator plans to increase its dividend to €0.70 per share from €0.64 in 2021. It also raised its full-year guidance, partly helped by the US dollar's appreciation, partly by an increase of the number of its US T-mobile customers.

ArcelorMittal also reported higher-than-expected third quarter earnings. The world's second largest steelmaker's EBITDA came at $2.7 billion. This was less than half the previous year's figure, but higher than the average forecast in a company poll of $2.34 billion.

Yesterday after the US market close, Beyond Meat slumped to a new record low as the company reported a wider-than-expected loss for its third quarter as demand for its meat substitutes tumbled.

The group posted a loss of $1.60 per share. Analysts had expected a smaller loss of $1.14. Revenue reached $82.5million, lower than the $98.1m expected.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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