The news shaping the markets today

Russia’s Defence Minister Sergei Shoigu ordered his military troops to withdraw from the southern Ukrainian city of Kherson, following a counteroffensive by Kyiv’s troops. The US dollar index traded lower on the news.

The Philippines reported a GDP expansion of 7.6% year-over-year in the third quarter, versus 7.5% growth in the prior quarter. However, the PHP/USD forex pair remained under pressure.

Australia’s inflation accelerated to 6% in November, from 5.4% in the prior month, rising for the first time since June, which sent the AUD/USD pair lower in forex trading this morning.

Russia’s annual inflation rate eased to 12.6% in October, from 13.7% a month ago. Despite the inflation rate slowing for the sixth month in a row, the RUB/USD forex pair remained under pressure.

The US Energy Information Administration said crude oil inventories had increased by 3.925 million barrels in the week ended November 4, higher than market views of 1.360 million barrels. The news sent the WTI crude oil futures lower this morning.

What’s happening: Shares of Meta Platforms surged on Wednesday, after the company confirmed its layoff plans.

What happened: The Facebook parent plans to reduce its workforce by as much as 13%.

The mass layoff, the first in Meta’s 18-year history, was followed by job-cut announcements from other tech majors.

Why it matters: Meta and other tech companies had expanded their teams aggressively amid the covid-19 pandemic, with an increase in social media usage and ecommerce activity by people stuck at home.

Meta’s CEO Mark Zuckerberg expected this growth to continue even after the pandemic subsided. However, the traction eased much earlier than projected, while a slowdown in the global economy and rising competition impacted Meta’s sales. The company’s overall business was also weighed down by advertisers reducing their spend due to cost pressures.

The Reality Labs unit’s business lost $9.44 billion during the first nine months of this year, with losses likely to increase significantly in 2023.

As a result, the company announced it would cut more than 11,000 jobs. This was followed by layoff announcements by other tech firms, including Microsoft, Twitter, and Snap.

As part of the severance package, the company plans to pay 16 weeks of base salary to impacted employees, along with two additional weeks for each year of their service. The employees will also get healthcare coverage for six months.

At the end of September, Meta had a global workforce of 87,314 people, compared to 68,177 a year ago. The company announced the latest move after its revenue contracted by 4% in the latest quarter, declining for the second straight quarter. Its net income also tumbled 52% in the recent quarter.

Meta also announced plans to reduce its discretionary spending and extend its ongoing hiring freeze through the next quarter.

How shares responded: Meta’s shares gained 5.2% to close at $101.47 on Wednesday. The stock has lost around 24% over the past month. Meta’s stock, which was worth over $1 trillion at one time, now has a market cap of around $257 billion, with shares losing more than 70% this year.

What to watch: Investors will keep an eye on further details of Meta’s layoff plan, as it is still unclear how many jobs will be impacted at its major Silicon Valley office and whether it is considering shutting down some of its offices.

The markets today

The US dollar will be in focus today ahead of some big economic reports

Context: The US dollar moved higher on Wednesday, as traders awaited the outcome of the mid-term elections.

Details: Markets closely monitored the tighter-than-expected midterm elections in the US. Although the Republicans were expected to win the US House, the control of the Senate was unclear.

US wholesale inventories grew by 0.6% to $918.5 billion during September. Traders also awaited October’s CPI report, which is expected to signal the Federal Reserve’s future rate path. Experts are currently projecting a rate hike of 50 basis points in December, but higher-than-expected inflation reading might increase speculations of another hike of 75 basis points.

The US dollar index, which measures the greenback’s performance versus a basket of major rivals, traded above the 110 level, rebounding from a seven-week low of 109.4 in the prior session.

The US dollar index gained around 0.8% to settle at 110.55 on Wednesday, after three sessions of declines.

The EUR/USD forex pair fell around 0.6% to 1.0014 on Wednesday, while the GBP/USD tumbled about 1.6% to 1.1357.

What are expectations: Traders will keep an eye on the election results. The release of data on inflation and initial jobless claims will also remain in focus. The annual inflation rate, which slowed for the third straight month to 8.2% in September, is expected to ease further to 8.1% in October. Analysts project jobless claims at 231,000 for the latest week, compared to 217,000 in the week ended October 29.

Other Markets: European trading indices closed lower on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 down by 0.14%, 0.16%, 0.17% and 0.30%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Japan’s machine tool orders, Saudi Arabia’s industrial production, Turkey’s unemployment rate, gross foreign exchange reserves and labour force participation rate, South Africa’s mining production, gold production and manufacturing production, Brazil’s inflation rate, US continuing jobless claims, natural gas stocks change and government budget, China’s total vehicle sales, new yuan loans, outstanding yuan loan growth, total social financing and money supply M2, as well as Mexico’s interest rate decision.

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