US stocks supported by the upcoming midterm elections, EU gas price cap agreement is under threat, APPL stock price
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Summary:
- A divided Congress may be viewed as "broadly neutral to moderately positive" for equities.
- The EU announced a pact to lower energy prices, which is now starting to fall apart two weeks later.
- China's zero-COVID policy may harm Apple in the short run.
Some analysts described the markets as “risk-on”
On Tuesday, European equities struggled to advance, and the dollar strengthened as traders gave up on expectations that China will relax its zero-COVID policy and exercise prudence in advance of the U.S. midterm elections. Some analysts have ascribed the markets' "risk-on" tone at the beginning of the week to China's potential relaxation of its stringent COVID-19 lockdown regulations. Some investors' expectations that the U.S. Federal Reserve may adopt a more dovish tone that has also helped the markets.
Investor attention was centered on the upcoming midterm elections in the United States, where the fate of the House of Representatives is on the line. Nonpartisan analysts predict the Republicans will gain a majority in the house, giving them the power to veto President Joe Biden's legislative program. Finding out the outcome of a vote could take days. Analysts typically consider a divided government to be a more market-friendly scenario. Options market analysts predicted that a Democratic upset victory may result in a downturn in the market.
According to Tom Caddick of Nedgroup Investments, a divided Congress may be viewed as "broadly neutral to moderately positive" for equities because it would show that major legislative changes are unlikely to occur in the future.
*U.S. STOCK FUTURES TICK HIGHER WITH ALL EYES ON MIDTERM ELECTIONS - https://t.co/36oDXQP2wg
— Investing.com (@Investingcom) November 8, 2022
🇺🇸 🇺🇸 pic.twitter.com/b0mBV9j6bs
EU gas price cap agreement under threat
Today's meeting of the EU financial ministers comes after Paolo Gentiloni, the commissioner for economics, confirmed for the first time that the union will experience a recession this winter and called for steps to make it as brief as possible. On Friday, the European Commission releases its forecasts.
After a late-night session, the EU announced a pact to lower energy prices, which is now starting to fall apart two weeks later. Countries that want a cap on gas import prices are holding out against other proposals, such cooperative procurement of supply, until the European Commission provides more information regarding the cap.
They are concerned that the commission's free market bureaucrats will reject the notion and fail to produce a workable price cap solution. Germany, on the other hand, is likely to veto any proposals made by Brussels because it thinks that traders would move their gas business abroad if the EU set a maximum price.
The creation of a price cap, according to member states opposed to it, should be subject to eight severe requirements listed in the initial commission plan, including that it not jeopardize supply security, not increase consumption, and not have an impact on intra-EU gas flows.
EU gas price cap ‘agreement’ starts unravelling https://t.co/SHwzoNLOym
— Financial Times (@FT) November 8, 2022
Apple stock price under pressure from COVID-19 lockdowns in China
At what is perhaps the worst possible time, COVID lockdowns at Apple's (AAPL) primary iPhone 14 Pro and iPhone 14 Pro Max factory in Zhengzhou, China, are affecting the corporation. Holiday shopping for new iPhones, Apple Watches, and iPads for friends, family, and self makes this the busiest time of year for Apple. Apple may not have enough iPhones on hand to meet demand this year as a result of the lockdowns at the Zhengzhou facility, which could have a big negative effect on the business's bottom line.
Although China's zero-COVID policy may harm Apple in the short run, analysts do not believe that it poses a long-term danger to the company. Customers still desire iPhones, after all, regardless of when they can get them. However, as the firm expands its product lines and may even enter the AR/VR market with its own headset in the long run, Apple's production issues will probably be nothing more than a passing blip.
Apple stock: China's Covid lockdowns an 'absolute gut punch': Analyst https://t.co/wT1h3tvPvW by @DanielHowley pic.twitter.com/pOE1FAWqaM
— Yahoo Finance (@YahooFinance) November 8, 2022
Sources: ft.com, finance.yahoo.com, investing.com, twitter.com
