World stocks tread water with eyes on Fed

AFP | London

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Global stock markets were steady on Monday as investors took few risks ahead of this week’s Federal Reserve meeting, which may yield clues to the direction of interest rates in coming months.

A surprise bid by Paramount for Warner Bros. Discovery brought the tech sector to life, however, as it could trigger a bidding war against Netflix. A monetary easing at Wednesday’s Fed meeting is fully priced into stock prices, analysts said, but investors will scour the central bank’s statement and news conference for insights into how many rate reductions might be on the cards next year, against a backdrop of stubborn inflationary pressures.

“A rate cut (Wednesday) when inflation remains well above target, should be a oneoff,” predicted Kathleen Brooks, research director at traders XTB. The “market is underpricing the uncertainty in the outlook for the Fed next year, which could lead to a big market reaction if the Fed does not have the appetite for more cuts”, she added.

Frankfurt outperformed other European markets after German industrial production unexpectedly jumped in October -- another sign that Europe’s crisis-wracked top economy may be turning a corner.

In New York, Warner Bros Discovery shares jumped by over seven% on the Nasdaq after Paramount countered last week’s Netflix bid for the company with an all-cash offer worth $108.4 billion.

Netflix stock slumped more than 2%, while Paramount rose by close to 2%.

Analysts had predicted last week that a Netflix/Warner linkup could amount to a major threat to Paramount’s streaming business.