Markets edgy on geopolitical worries, but bitcoin surges through $12,000 - as it happened
Worries over Brexit, US tax reforms and the debt ceiling are all weighing on shares today
- Introduction: Markets are down
- European in the red after Asian losses
- Nikkei suffered biggest fall in eight months
- Worries over Trump, Brexit, US debt ceiling all blamed
- Bitcoin hits new highs - can it really last?
- Australian growth missed forecasts
5.34pm GMT
Bubble or not, Bitcoin, meanwhile, is still sharply higher, albeit off its record levels. It is up 8.7% at $12,696, down from the peak of 12,815 recorded earlier.
And on that note it's time to close for the day. Thanks for all your comments, and we'll be back tomorrow.
5.25pm GMT
It has been a nervous day for investors in equities, with markets unsettled by a range of factors, including the latest Brexit confusion, concerns about the US tax reforms and the country's debt ceiling and next week's expected interest rise from the Federal Reserve. But European markets ended off their worst levels, with the final scores showing:
4.19pm GMT
US crude oil stocks fell by more than expected last week but after an initial rise, prices fell back again as investors focused on rising production figures.
Crude inventories dropped by 5.6m barrels, more than the forecast 3.4m decline. But gasoline stocks rose by a much larger than expected 6.8m barrels, rather than the 1.7m rise which had been forecast.
Demand for gasoline is curiously weak. And these weeks towards the end of the shopping period normally rival the summertime. So the report overall was bearish.
4.03pm GMT
Earlier the Bank of Canada held the country's interest rate at 1%, as expected.
But it suggested that further rate hikes, after rises in July and September, would be required "over time" and the bank would be cautious about assessing the outlook for the economy.
3.54pm GMT
Global markets have come off their worst levels but there is still a fairly downbeat mood for the most part. Connor Campbell, financial analyst at Spreadex, said:
The FTSE managed to shake off its early losses this Wednesday, a luxury not afforded to its European and US peers.
Signs of a reversal in the mining sector, and the pound's continued problems, meant the UK index could push 0.3% higher this afternoon, once against lifting the FTSE above 7350. Sterling, meanwhile did see its situation improve, but not by much; the pound is still down 0.4% against the dollar and 0.3% against the euro, with investors processing the lunchtime shock of David Davis admitting that the government hasn't done a sector-by-sector Brexit impact assessment.
2.29pm GMT
The Guardian's Business Today email has expanded its property coverage.
As well as key news headlines, an agenda of the day's main events, insightful opinion pieces and a quality feature, there is now more coverage of house prices, mortgages, the rental market - and the best picture galleries from our Money pages.
Related: Business Today: sign up for a morning shot of financial news
2.26pm GMT
Speaking of Brexit, chancellor Philip Hammond is up before the Treasury Select committee and leaving the EU is obviously one of the topics.
All the developments are in our politics live blog:
2.05pm GMT
Back with the pound, and any breakthrough in the Brexit discussions are likely to boost the currency, says Richard Falkenhill, senior foreign exchange strategist at Nordic bank SEB:
Despite new set-backs in Brexit talks, we think there will be a solution which will pave the way for EU leaders to initiate stage two in talks when they meet next week (14-15 December). Should this be the case, our estimated Brexit risk premium suggests it would be followed by a generally stronger GBP. We target at least 0.85 in EUR/GBP on a solution that would break current deadlock in Brexit talks.
Time is running out but our base scenario remains that leaders will come up with a solution that satisfies EU-leaders on 14 December, moving negotiations to stage two. We continue to expect any signs of a breakthrough in negotiations between the parties to boost the GBP by decreasing the Brexit risk premium. In our view, the risk premium reflects the possibility that the UK will leave the EU without a deal in March 2019, a situation that would likely be extremely negative for the country's growth outlook.
1.59pm GMT
ADP's commentators are upbeat about their latest jobs report, although there is a warning the market could overheat in 2018:
"The labor market continues to grow at a solid pace," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase it will become increasingly difficult for employers to attract and retain skilled talent."
Mark Zandi, chief economist of Moody's Analytics, said, "The job market is red hot, with broad-based job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology, brick-and-mortar retailing being the best example. There is a mounting threat that the job market will overheat next year."
1.37pm GMT
Newsflash: America's private sector created 190,000 jobs last month, according to payroll operator ADP.
That's a pretty decent performance, and bang in line with forecasts. It suggests the US employment market remains healthy - which bodes well for the wider Non-Farm Payroll (NFP) figures on Friday.
US ADP Employment change at 190K : strong and stable job creation for more than 6 years now. Quite amazing. #economy #Markets pic.twitter.com/csXHoU7SPw
#USA Nov ADP job creation at 190,000, thus trend intact with services +155k and mfg +36k pic.twitter.com/EzBIzV7KoF
1.12pm GMT
One rational explanation for bitcoin's recent explosive surge is that investors will soon be able to trade bitcoin futures.
The advent of bitcoin derivatives will open up cryptocurrencies to a wider range of investors (City trading desks aren't necessarily au fait with bitcoin wallets). That could trigger a new surge of money in, right?
People will see just how badly priced it is. At the moment it's dominated by enthusiasts and speculators who want the price to go up.
Once you get enough shorts and enough people taking the other side of the bet, there will have to be a significant repricing that pops the bubble.
12.49pm GMT
Britain's FTSE 100 index is now defying the global selloff, and has crept up by 10 points (or 0.15%) today.
But don't get the bunting out. The recovery is due to the pound's weakness, as the lack of Brexit progress alarms traders.
Sterling had previously rallied to two month highs against the greenback on the prospect of a deal being achieved, as both parties appeared to have closed in on a financial settlement being agreed, at least in theory.
As it turns out, what had been touted as being the largest stumbling block has turned out to be nothing in comparison to finding a solution to the border problem that satisfies all involved. The next week could get very tense for Theresa May and questions over her leadership are already once again being asked, providing more downside pressure on the currency.
#Bloomberg #Markets on #Sterling and the #Brexit negotiations.
https://t.co/xUnL7QXrKG #fx #forex #currency #GBPUSD #GBP #economy #markets #UK @business pic.twitter.com/p1xmNcUNtx
12.03pm GMT
South African retail group Steinhoff International have taken an almighty dive this morning, after it shocked the markets by announcing it had discovered accounting irregularities.
Steinhoff, which recently bought British budget shops chain Poundland, has called experts from PwC in to examine its books. It also announced that its chief executive Markus Jooste had resigned.
Steinhoff bonds in freefall this morning - currently down 29 points and this is an IG company! https://t.co/ygWC4CcbAI pic.twitter.com/R1hjPRDSJr
11.27am GMT
Bitcoin just struck a new record high, at $12,800.
But this morning's ascent may have left it feeling dizzy -- the cryptocurrency promptly tumbled by $500 in a minute.
Look at who Bitcoin was created by - some reclusive coding genius with a specific world view. For many people that is enough to dismiss it as a nerdy niche to be ignored. Yet reclusive coding geniuses have in recent years built some of the most successful companies in the world.
But with Futures on Bitcoin to be launched later this month, the question is will that be the death knell, or another leg upwards, once hedge funds/ pension funds get involved? The jury is out, but hedge funds/ pension fund involvement won't necessarily chime with those who were attracted to Bitcoin in the first place."
Bitcoin just lost $488 in 3 minutes. Had climbed as high as $12,815.18.
#Bitcoin down about $500 in 3 mins. brave new world
11.13am GMT
Most stock markets around the world are down today, most currencies have dropped against the US dollar, and most commodity prices are lower too.
Lots of red on the scoreboard today, particularly with Asian markets and industrial metals https://t.co/PSF1UE7h9S pic.twitter.com/1u8OKUNrMX
10.58am GMT
Over in the City, shares in insurance and holiday group Saga have plunged by 25% after a shock profits warning this morning.
Saga, which targets the over-50s, warned it has suffered from the collapse of Monarch Airlines this autumn. This will wipe 2m off its profits this year.
Saga saga... shares slump by more than 20%, most on record. pic.twitter.com/h9CV5eSz9o
10.30am GMT
The pound has lost ground against other major currencies today.
Sterling dropping again, back below $1.34. Wake me up when the trade-weighted index is above 80 or below 75. pic.twitter.com/eWCqABAikL
David Davis: #Brexit impact papers
-First they are secret
-Then delay handing over
-Now they don't exist
-Govt will do them later
Farcehttps://t.co/czaZIBr7Ah
Brexit Committee hearing on sectoral analyses starts up. I'm having flashbacks to university seminars where I'd been caught out pretending to have done the reading.
10.25am GMT
Wall Street is expected to fall again when trading begins in four hours.
The Dow Jones industrial average is down by 65 points in the futures market, or around 0.3%, and the S&P 500 is also being called lower.
Futures are down again today https://t.co/PSF1UE7h9S pic.twitter.com/mU5g7PEXhT
Markets show ever more signs of winding down for the holiday period, but continue to be buffeted into spasms of activity by the various political melodramas, which continue to pockmark this year.
9.12am GMT
There are plenty of theories floating around for why the markets are down.
One is that traders are banking profits after a successful year, and hunkering down until 2018.
[Investors are] locking in profits earlier than usual for the year and not opening any new positions," said
"Eventually, as profit taking subsides, buying for the new year will appear as people look toward 2018."
Global equity bulls were nowhere to be found during Tuesday's trading session as market players evaluated the possible impact of proposed US tax cuts. World stocks were mostly lower amid a global technology selloff, with the lack of appetite for riskier assets punishing European shares and Wall Street.
Asian markets stumbled lower during early trading on Wednesday, following Wall Street's overnight decline. With the renewed Brexit uncertainty likely to tarnish risk sentiment further, European stocks remain vulnerable to further downside. American shares are still at risk of extending losses this afternoon, if concerns heighten over a potential US government shutdown on Friday if a spending bill is not approved.
Ten years on from the global financial crisis, we are witnessing the product of the biggest monetary policy experiment in history. Investors have forgotten about risk and this is playing out in inflated asset prices and inflated valuations. Whether it's Bitcoin going through $10,000, European junk bonds yielding less than US Treasuries, historic low levels of volatility or smart beta ETFs attracting gigantic inflows - there are so many lights flashing red that I am losing count.....
The difference between the performance of value stocks and growth stocks today, is greater than at any stage in stock market history.
8.50am GMT
Brexit angst is weighing on the pound again this morning, following reports of a new cabinet split.
According to the Daily Telegraph, Theresa May is facing a Cabinet revolt led by Boris Johnson and Michael Gove, who fear the Prime Minister is trying to force through a soft Brexit.
NEW Boris Johnson and Michael Gove 'could lead revolt amid fears of soft Brexit' https://t.co/Wuk7ypSvGR
8.43am GMT
As feared, European stock markets have fallen in early trading, following the losses in Asia.
London's FTSE 100 is down 24 points, or 0.3%, partly dragged down by mining stocks following the fall in Chinese metal prices today.
Optimism on US tax reform has given way to concern on Friday's deadline to avoid a government shutdown.
There have been no public developments on the UK's position on the Irish border and reports suggest that EU officials are maintaining the line that the "deadline of deadlines" for the UK's proposals is this Friday.
8.31am GMT
The AFP newswire has a good take on today's selloff. Here's a flavour:
Technology and energy firms were the biggest losers as Asian markets tumbled on Wednesday, extending a retreat across Europe and New York.
A global equity rally has hit the buffers this week as the US probe into Russia's alleged election meddling sows uncertainty, Britain struggles to reach a Brexit deal with the European Union and traders remain cautious about Washington's ability to push through tax cuts.
8.28am GMT
Former Republican congressman Ron Paul (a libertarian and long-time critic of central bankers) uncovered plenty of support for bitcoin among his followers:
It's come to this pic.twitter.com/VH4Y74JvK9
8.22am GMT
Is Bitcoin going to keep climbing, or is a crash around the corner?
Naeem Aslam of Think Markets thinks we'll see more record highs, as investors will soon be able to trade bitcoin derivatives (allowing them to profit without actually owning the asset itself).
It appears that the momentum is unstoppable and we do think that the 14K level could reach before the bitcoin futures start trading at the CBOE which is on the 11 December. Principally, investors are thoughtful that when institutional money (hedge funds) will be involved, the chances are that the price would move higher. Large investment funds have not been able to take the piece of the pie yet and that would be their opportunity to get on board.
Bitcoin futures trading on the major stock exchanges would provide more assurance for retail investors that the derivative is trading in a regulatory frame work. This would provide tail wind for bitcoin.
I have done a quick informal survey of 30 businesses asking if they would take bitcoin as payment for my groceries, haircut, electricity and the like.
26: "WTF are you talking about"
3: "You have to be kidding"
1 asked: "I was thinking of buying bitcoin. Should I do it now?"
8.18am GMT
Although the markets are down, Bitcoin is maintaining its charge upwards.
The cryptocurrency has gained almost 6% this morning, bursting through the $12,000 mark to hit $12,488. Quite remarkable, given it started this year at $1,000.
Bitcoin today https://t.co/zUZLffH6A5 pic.twitter.com/EGVZdcx6Jv
7.58am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
There's an edgy mood in the financial markets today, as investors worry about geopolitical issues and the state of the global economy, and wonder if a correction could be looming.
Having seen some decent gains so far this year there appears to be increasing evidence that markets are starting to look a little tired. The first clues appeared yesterday when US markets after racing out of the blocks on Monday found it difficult to hold onto a lot of their gains, even if the Dow did manage to finish the day higher. The S&P500 on the other hand declined for the third day in succession, its worst run of losses since August.
This declining momentum has been something that has been particularly notable in European markets since the peaks back in early November, and while we have managed to find some level of support for most of the past week or so, the subsequent rebounds have been getting shallower.
Related: Private investment helps Australia's economy grow by 2.8%
Chinese stock markets staged a big reversal. #Shanghai Composite managed to narrow its loss to 0.3%, closed at 3294, after slipping by over 1.2%; Nasdaq-style #Chinext rebounded strongly before close, up 1.5% after dipping 0.8% at one point. pic.twitter.com/qP7E8P7BWM
Continue reading...