China relaxes on COVID, FTX freeze, Russian pullout

By Geoffrey Smith 

-- China announces its most significant relaxation of the COVID-Zero policy yet,tradeking foreign exchange platform sending local stock markets and global risk assets flying. The mess from FTX's collapse gets worse, as its assets are frozen and its founder reportedly comes under investigation by U.S. authorities. U.S. stocks are set to build on Thursday's explosive post-CPI rally with the Michigan Consumer Sentiment index due later. Amazon joins the list of tech mega caps looking at large-scale cost cuts, while Elon Musk reportedly warned Twitter staff that the company he bought for $44 billion faces bankruptcy. And Russia completes its retreat from Kherson in Ukraine, while Vladimir Putin skips the G20 summit to concentrate on the deteriorating situation in Ukraine and at home. Here's what you need to know in financial markets on Friday, 11th November.

1. China relaxes quarantine rules; stocks, yuan, commodities soar

China provided another leg up to global markets that were already rallying hard after the lower-than-expected October numbers from the U.S.

The National Health Commission said it will for those arriving in the country to a total of 8 days from 10, and also relaxed the requirements for contacts of infected people in parallel.

The moves are the most significant relaxation of China's Zero-COVID policy yet and come despite serious outbreaks taking place in Beijing, Guangzhou, and Zhengzhou. The Hong Kong jumped by 7.7% while mainland Chinese markets rallied by between 2% and 4%. The hit a one-month high before retracing to trade up 0.7% by 06:45 ET (11:45 GMT).

Commodities also surged, with futures rising over 3% to $89.31 a barrel and up 3.0% at $96.48 a barrel.

2. Contagion spreads as FTX's assets are frozen

Regulators around the world froze the assets of collapsed exchange FTX, in another devastating blow to the credibility of the crypto industry.

The Securities Commission of the Bahamas, where FTX is based, said it was “aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research,” and had consequently applied for the company to be placed in . The Wall Street Journal had earlier reported that FTX had misappropriated client deposits, lending them to affiliated hedge fund Alameda Research so that Alameda could cover up the extent of their losses.

FTX is facing a shortfall of anywhere between $8 billion and $10 billion according to reports, which appears to leave little hope for customers still trying to get their money out, despite an with the operators of the TRON network overnight aimed at easing its liquidity crunch. Reports also alleged that FTX founder Sam Bankman-Fried is under investigation by the U.S. Department of Justice and the Securities and Exchanges Commission.

, one of a handful of crypto platforms partially rescued by FTX earlier in the year, again halted client withdrawals.

By 06:30 ET, was up 6.1% at $17,671 while was up 8.9% at $1,283, helped the broader rally in risk assets but still down sharply from a week ago. FTT, FTX’s native token, was quoted around $3.61, down nearly 90% on the week.

3. Stocks set to build on post-CPI gains; Michigan Consumer Sentiment due

U.S. stocks are set to extend their rally at the open, building on their best day in over two years on Thursday after new data suggested that U.S. inflation may have peaked. Bulls were emboldened by comments from the Federal Reserve’s Mary Daly and Patrick Harker suggesting that the central bank could afford to slow down the pace of tightening from now on.

The thesis could still be tested by the renewed rally in commodity prices due if China reopens its economy, but that appears to be a worry for another day.

By 06:15 ET, were up 123 points or 0.4%, and were up by a similar amount. Tech-heavy , more sensitive to expected movements, were again outperforming with a 0.6% gain. The Nasdaq had risen 7.4% on Thursday, while the Dow had gained 3.7% and the 5.5%.

Stocks likely to be in focus later include Amazon (see below) and Softbank (OTC:), which reported a as it realized gains on a chunk of its (NYSE:) stake. That offset a $10 billion loss at its Vision venture capital fund.

A thin earnings calendar leaves the index at 10:00 ET as the main focus of the trading day.

4. Amazon eyes cost cuts, Twitter 'faces bankruptcy'

Amazon (NASDAQ:) is set to join the list of tech companies making big cuts to their loss-making bets on the futures, according to The Wall Street Journal.

The paper said on Thursday, it’s focusing on the division that houses its home assistant Alexa, where operating losses are currently running at $5 billion a year, according to the WSJ. However, it’s also telling people in other divisions that they should look for openings elsewhere in the company.

Costs in Amazon’s core e-commerce business have risen sharply in the last few quarters, putting pressure on a group that only had one reliably profitable unit – Cloud hosting provider AWS. Amazon has not confirmed the report, which came in the same week as fellow tech mega-cap Meta Platforms (NASDAQ:) said it will lay off nearly one in seven of its workforce. 

Elsewhere in the tech space, Elon Musk reportedly warned Twitter staff that the company he bought for $44 billion without radical surgery, while the chaotic flip-flopping on its policy toward verified and official accounts continued.

5. Russia completes Kherson withdrawal; Gas crisis reaches Pakistan

Russia said it has from the right bank of the Dnipro river, effectively handing back control of Kherson, the only regional capital it had conquered in the first stage of its invasion of Ukraine.

The Kremlin confirmed that President Vladimir Putin will skip this weekend’s G20 summit in Indonesia, amid growing signs of excess by domestic security forces to clamp down on any perceived signs of opposition.

The global energy crisis unleashed by Russia’s invasion claimed another victim earlier, as Pakistan said it will ration supplies over the coming winter, unable to compete with more financially powerful buyers from east Asia and Europe in the global market for liquefied natural gas.

Statement: The content of this article does not represent the views of FTI website. The content is for reference only and does not constitute investment suggestions. Investment is risky, so you should be careful in your choice! If it involves content, copyright and other issues, please contact us and we will make adjustments at the first time!