By Geoffrey Smith
Investing.com -- China's central bank hints at a possible policy easing as the real estate crisis slows the economy. Europe protests violently against the reintroduction of lockdowns and the imposition of vaccine mandates. Activision Blizzard (NASDAQ:ATVI) CEO Bobby Kotick may be on the way out, and Zoom Video (NASDAQ:ZM), the pandemic bellwether stock par excellence, releases earnings after the close. Here's what you need to know in financial markets on Monday, 22nd November.
1. China hints at monetary easing
China’s central bank hinted it will ease monetary policy for the world’s second-largest economy, as it grapples with a slowdown caused by the problems of the real estate sector.
The People’s Bank of China left its key prime rate unchanged at 3.85% at its regular policy meeting earlier but dropped some of its more hawkish comments from the statement accompanying the decision. It had previously spoken of the need to control monetary supply tightly and not to overwhelm the economy with stimulus.
The yuan, which has been one of the strongest emerging-market currencies all year, edged higher to 6.3794 against the dollar, continuing to test what would be a 3 ½-year high, while benchmark stock indices rose as much as 1.4%.
2. Activision Blizzard CEO may be on the way out
Bobby Kotick, the embattled CEO of videogames publisher Activision Blizzard, has told senior executives at the company he may quit if he isn’t able to quickly resolve the sexual harassment scandal plaguing the company, according to a report in The Wall Street Journal.
Activision’s stock, which has been hit hard in recent months by a series of allegations suggesting a toxic and discriminatory workplace culture, rose over 2% in premarket trading in response.
The report follows allegations last week that Kotick had been aware of problems at the company for much longer than he has so far admitted. The allegations prompted widespread staff discontent and concern among major gaming partners such as Microsoft (NASDAQ:MSFT) and Sony (NYSE:SONY).
3. Stocks set to open higher after Clarida blow; KKR, Zoom Video eyed
U.S. stocks are set to start the week clearly higher, after closing last week on a mixed note, torn between a generally positive economic outlook and the fear of an accelerated tightening of monetary policy. Federal Reserve vice-chairman Richard Clarida had acknowledged that Fed policymakers may discuss a faster phase-out of its bond purchases than currently planned when they meet again next month.
By 6:20 AM ET (1120 GMT), Dow Jones futures were up 167 points, or 0.5%, while S&P 500 futures and Nasdaq 100 futures were both up 0.4%.
The day is devoid of major economic indicators. Zoom Video heads a thin earnings slate, but only after the close. Other stocks in focus include Vonage, which Ericsson (BS:ERICAs) wants to buy for $6.2 billion, and KKR (NYSE:KKR), which has lit a fire under European telecom stocks with a bid for Telecom Italia (MI:TLIT).
4. Europe riots against Covid-19 measures as Bundesbank sounds inflation alarm
Germany’s inflation rate will hit 6% this month while the economy will slow, the Deutsche Bundesbank warned in a monthly report that puts the recent surge in Covid-19 cases across Europe into an even more gloomy context.
There were riots against the reintroduction of mobility restrictions in the Netherlands and Belgium at the weekend, and smaller-scale protests in Italy, Croatia and Austria, the last of which imposed a full nationwide lockdown at the end of last week.
Karl Lauterbach, a leading health expert with Germany's center-left SPD that will most likely head the next coalition government, said at the weekend that the country could no longer afford to rule out mandating vaccination for everyone. The euro continued to struggle below $1.1300, meanwhile.
5. Oil struggles after Japan warms to reserve release plans
The news out of Europe also weakened crude oil, which has fostered expectations of widespread mobility curbs over the next couple of months. Institutes such as the IEA and OPEC have already warned that the market could tip from shortage to surplus as a result of this and other trends.
By 6:30 AM ET (1130 GMT), U.S. crude futures were up 0.3% at $76.14 a barrel, while Brent futures were up 0.2% at $79.05 a barrel, close to their intraday lows.
On Friday, CFTC data had showed that speculative long positions had fallen again in the week through Tuesday, suggesting that financial players have lost faith in oil’s momentum amid rising talk of a coordinated release of strategic reserves by major consumers. Japan’s new Prime Minister Fumio Kishida indicated earlier Japan would be open to such a move.