Week of Nov 25, 2022 Weekly Recap & The Week Ahead
“Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.” — Larry Hite
1. Fed Minutes Show Most Officials Favored Slowing Rate Rises Soon — their discussion at the meeting, described in minutes of the gathering released Wednesday, suggests they could downshift to a rate rise of 0.5 percentage point, or 50 basis points at their meeting next month. “A substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate,” the minutes said. Officials approved the fourth consecutive supersize rate increase at their Nov. 1-2 meeting, bringing their benchmark rate to a range between 3.75% and 4%. They are boosting rates at the fastest pace since the early 1980s to reduce inflation that is running near a 40-year high.
All 19 officials at the meeting supported the decision to raise rates this month and broadly agreed they needed to keep lifting them, the minutes showed. Still, the discussion revealed some were more anxious about the possibility of overdoing the increases, while others worried they might not be making enough progress to warrant a downshift.
2. Violent Protests Erupt at Apple’s Main iPhone Plant in China — hundreds of workers at Apple Inc.’s main iPhone-making plant in China clashed with security personnel, as tensions boiled over after almost a month under tough restrictions intended to quash a Covid outbreak. The protest started overnight over unpaid wages and fears of spreading infection, according to the witness, asking to remain anonymous for fear of repercussions. Several workers were injured and anti-riot police arrived on the scene Wednesday to restore order, the person added.
3. China’s Daily Covid Tally Tops 30,000 for First Time as Curbs Spread — China’s daily Covid infections broke through 30,000 for the first time ever as officials struggle to contain outbreaks that have triggered a growing number of restrictions across the country’s most important cities. Rising infections across the country are challenging Chinese authorities who want to shift away from city-wide lockdowns to more targeted measures that are less disruptive to residents and businesses. But after initially easing off on testing and movement restrictions — in line with a new 20-point virus playbook issued by Beijing — officials in some places are again imposing mass testing orders and lockdowns as they strive to meet the overriding objective of suppressing Covid.
That’s meant instead of issuing explicit orders, major cities are locking down apartment block by apartment block and imposing other under-the-radar curbs. In Beijing supermarket delivery apps are being overwhelmed after residents across Chaoyang, its biggest district, were told not to leave their homes unless necessary. Grocery outlets in the district are also no longer taking orders.
4. EU Unveils Proposal to Cap Natural-Gas Prices — the European Union set out the details of a long-debated proposal to cap natural-gas prices on the bloc’s main trading hub, part of an effort to shield consumers from the effects of higher energy costs linked to Russia’s invasion of Ukraine.
The European Commission, the bloc’s executive arm, said that its proposal was designed to deal with exceptional circumstances where the benchmark price for natural gas in Europe exceeds 275 euros, equivalent to about $282, per megawatt hour for two weeks. Prices would also need to be above reference levels by a set margin for 10 consecutive days within those two weeks. The proposal for a price cap, which the commission refers to as a market-correction mechanism, would apply to month-ahead prices on the Title Transfer Facility, a virtual trading hub based in the Netherlands. The commission said over-the-counter trading wouldn’t be affected because it is difficult to monitor and those trades can help in balancing markets.
The week ahead — Economic data from Econoday.com:
