Global Shares Mixed as Pelosi’s Visit to Taiwan Annoys Beijing
The global shares market was mixed on Wednesday as traders eyed the potential economic impact following a visit to Taiwan by US House Speaker Pelosi. London and Shanghai fell. Tokyo, Frankfurt and Hong Kong were promoted. The price of oil decreased. China, which claims self-governing Taiwan as part of its territory, banned imports of Taiwanese citrus fruits and frozen fish in response to Pelosi’s visit. However, disruptions to the flow of processor chips and other industrial goods were avoided. It is a move that could destabilize the global economy.
The real show of Chinese power is yet to come. In early trade, the FTSE 100 lost 7,392.56, 0.2%. The DAX gained less than 0.1% to 13,454.28. The CAC 40 rose to 6,417.52, up 0.1% overall.
On Wall Street, benchmark S&P 500 index futures rose 0.2%. The Dow was up 0.3%. The S&P 500 lost 0.7% on Tuesday after the Labor Department reported that US employers posted fewer jobs than expected after raising interest rates, to reduce rising inflation. The benchmark is down nearly 1% this week.
The Dow lost 1.2%, mainly due to a drop in Caterpillar, the maker of earth-moving equipment. The total fell 5.8% after reporting weaker-than-expected earnings in the latest quarter. The Nasdaq Composite was down 0.2% at 12,348.76. The Shanghai Composite lost 0.7% to 3,163.67. The Nikkei 225 advanced 0.5% to 27,741.90. The Hang Seng added 0.4% to 19,767.09.
Shares and Expectations
Taiex rose to 14,777.02 after Beijing gave no sign that it might crack down on industries such as Taiwanese makers of processor chips, which require Chinese factories that assemble the world’s smartphones. The Kospi advanced 0.9% to a total of 2,461.54. The S&P-ASX 200 fell to 6,975.90.
The Sensex lost less than 0.1% to close at 58,158.34. New Zealand and Southeast Asian markets have grown. Investors fear that aggressive efforts by the Federal Reserve and other central banks to tame inflation at multi-decade highs could dampen global economic growth.
The Labor Department said Tuesday that employers posted 10.7 million jobs in June, down from 11.3 million in the previous month. However, it is still a relatively high figure. Jobs, which had never topped 8 million before last month, topped 11 million each month from December to May before easing in June.
Some weak data on the US economy added to speculation that peak inflation has passed. However, it also indicates that the risk of recession is increasing. US benchmark crude oil in energy markets was at $93.45 per barrel in electronic trading on the New York Mercantile Exchange. The previous day, the contract was $94.42. The price of Brent oil decreased and amounted to 99.47 USD per barrel. The dollar fell to 133.05 yen. The euro rose to $1.0192.
PayPal Stocks
PayPal shares rose on Wednesday after the company announced that it is ready to work with Elliott Management. The e-commerce firm added $15 billion to its PYPL share buyback program as it reported mixed financial results for the June quarter. PayPal reported its June quarter earnings late Tuesday. Second-quarter earnings for PayPal stock fell year-over-year. However, views came out on top as total payouts missed estimates. PayPal confirmed that Elliott Management had taken a $2 billion stake in the company.
PayPal has got into an information-sharing contract with Elliott Management. The company plans to save 900 million dollars in 2022 and 1.3 billion dollars in 2023. At Susquehanna, analyst Friedman noted that in terms of cost discipline, PayPal is committed to fourth-quarter 2022 and 2023 margin expansion. These initiatives are expected to contribute to long-term earnings strength.
PYPL stock fell 12.7% to 101 in early trading on the stock market today. Shares of PayPal rose 1.2% in the regular session on Tuesday. The firm’s earnings for the quarter ended June 30 were 93 cents per share. This is 19% less than the previous year.
The e-commerce company said revenue rose 10% to $6.8 billion. In Q2, the total volume of payments processed from merchant customers increased by 13%. In total, it amounted to $339.8 billion. Analysts had thought a total payment worth $342.83 billion. For the current quarter, PayPal forecasts EPS of 95 cents. As e-commerce booms amid the coronavirus pandemic, PayPal’s stock has soared. However, the firm’s shares fell by around 71% last July. Former parent eBay spun off PayPal in 2015 and moved its payment processing to Adyen.
