Charting the Markets: Investors Await Fed Decision
It's been 49 days since the Federal Reserve last met on Oct.28. Then, the odds of a U.S. interest rate increase this month stood at 35 percent, according to Bloomberg data. Today the probability is 78 percent. In the past seven weeks global stocks, as measured by the MSCI All Country World Index, have dropped 3 percent. Emerging market equities have borne the brunt of the fall, with the MSCI Emerging Markets Index sinking 9 percent. The future for most asset classes may rest on Fed chair Janet Yellen's ability to persuade investors the rate-tightening path will be a gradual or shallow one.
Hong Kong's Hang Seng Index rose for the first time in 10 days, ending the longest losing streak since July 1984. It's been a year of two halves for the Hang Seng, which rose 20 percent in the first five months of 2016 to a seven-year high, making it one of the 10 best-performing global equity benchmarks. Since then, as China's economy slowed and the nation devalued its currency, the gauge has sunk 24 percent. Prada shares sank to a record low in Hong Kong trading today. The luxury-goods company reported weaker-than-estimated third-quarter profit as sales in the Asian city and Macau continued to weaken.
Industrial metals have been battered in the run-up to today's Fed rate decision. An LME Metals Index has sunk 27 percent, its third year of declines and worst streak on record. Nickel, which is used to make stainless steel, has plummeted 43 percent to a 12-year low. The future might be a little rosier, according to Morgan Stanley. Nickel, copper and zinc have been chosen as its top picks heading into 2016. The three metals were also selected as preferred commodities by Credit Suisse Group.
French supermarket operator Casino Guichard-Perrachon is selling assets in Vietnam, Thailand and Colombia to cut debt by more than 2 billion euros ($2.2 billion) next year. The shares jumped the most since 2008. It's been a year to forget for the company because of a recession in Brazil and a plunging currency there. Around half of its revenue is generated from South America. The sale of Latin American supermarket assets in July raised about 1.7 billion euros. Casino shares have sunk 35 percent in 2015.
Mark Barton is a presenter on Bloomberg TV. Follow him on Twitter @markbartonTV