May 4, 2022 stock market coverage

US Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4, 2022. - The Federal Reserve on Wednesday raised the benchmark lending rate by a half percentage point in its ongoing effort to contain the highest inflation in four decades.
Fed raises interest rates as it tries to catch up with inflation
02:00 - Source: CNNBusiness

What we covered here

  • US stocks surged after the Fed raised rates by a half-percentage point for the first time since 2000
  • The Fed says inflationary pressures will force the central bank to continue raising rates in the future.
  • But it won’t Fed Chair Jerome Powell said the Fed isn’t considering rate hikes of more than a half-point per meeting, sending stocks soaring.
30 Posts

Here's how higher rates will impact you

The Covid era of free money is over.

After the Fed’s historic rate hike Wednesday, Americans will start to see higher borrowing costs.

Every time the Fed raises rates, it becomes more expensive to borrow. That means higher interest costs for mortgages, home equity lines of credit, credit cards, student debt and car loans. Business loans will also get pricier, for companies large and small.

For most Americans, the most tangible way this is playing out is with mortgages, where expectations of rate hikes have already driven up rates: A 30-year fixed-rate mortgage averaged 5.1% in the week ending April 28, up sharply from under 3% in November.

Higher mortgage rates will make it harder to afford home prices that have skyrocketed during the pandemic. That weaker demand could cool off home prices.

On the plus side, cash sitting in bank accounts will finally earn something (albeit not much).

For savers, money stashed in savings, certificates of deposit (CD) and money market accounts earned almost nothing during Covid (and for much of the past 14 years, for that matter). Measured against inflation, savers have lost money. But these savings rates will rise as the Fed moves interest rates higher. Savers will start to earn interest again.

But this takes time to play out. In many cases, especially with traditional accounts at big banks, the impact won’t be felt overnight. And even after several rate hikes, savings rates will still be very low — below inflation.

The high cost of living is causing financial headaches for millions of Americans, and it will be a bit before the Fed’s interest rate hikes start chipping away at inflation. Even then, inflation will still be subject to developments in the war in Ukraine, the supply chain mess and, of course, Covid. Read more

Dow surges more than 900 points for its best day in 2 years

US markets rallied sharply on Wednesday, posting their best day in two years, after the Federal Reserve Chair Jerome Powell announced a half-point rate hike but assured investors that even bigger rate hikes are “not something the [Fed] is actively considering.”

Powell also used his press conference to repeatedly reassure Americans of his confidence in the US economy and to deflate rampant recessionary fears.

Markets had been relatively flat this week as investors held their breath ahead of the FOMC announcement, their collective sigh of relief appears to have finally lifted stocks into the green.

The rate hikes and subsequent market lift follow a very bad April, where US markets had their worst month in years.

The Dow closed 932 higher, rising 2.8%. That was the index’s best day since November 9, 2020.

The S&P 500 was up by 3%. That was the stock market’s best performance since May 18, 2020.

The Nasdaq grew by 3.2%, it’s best day since February 24, 2022.

Manchin says inflation — not abortion — will be driving factor in midterms; says he’s going back through his notes to see if Kavanaugh told truth

Sen. Joe Manchin acknowledged that voters’ perceptions of the economy are dropping and argued that inflation — not abortion — will be the driving force in the midterm election, even as his own party is rallying against the leaked Supreme Court draft suggesting Roe v. Wade will be overturned as a defining issue.

“Inflation is the number one driving factor … I believe in my state right now it’s hurting everybody,” Manchin told CNN. He added that voters are more concerned about their pocketbooks than anything else.

“Follow the money,” Manchin said.

Manchin, who opposes abortion rights, told CNN he was studying how Brett Kavanaugh represented himself on the issue when the two met in 2018. Manchin was the lone Senate Democrat who voted for Kavanaugh.

“We are going back through all the things we have — we had meetings with him — to find out what he said and how it was actually presented to us. I had many conversations with him,” Manchin said.

Manchin said he didn’t know if Kavanaugh or Gorsuch lied to Congress. Yesterday he defended his vote for Kavanaugh in an interview with CNN.

Manchin did not rule out backing a narrower abortion rights bill now being discussed by Sens. Collins and Murkowski. “We are looking at everything,” he said.

Markets rally after Fed announcement

A trader works, as Federal Reserve Chair Jerome Powell is seen delivering remarks on screens, on the floor of the New York Stock Exchange in New York City on May 4.

US markets rallied sharply on Wednesday afternoon as the Federal Reserve Chair Jerome Powell announced a half-point rate hike but assured reporters that even bigger rate hikes are “not something the [Fed] is actively considering.”

Markets had been relatively flat this week as investors held their breath ahead of the FOMC announcement, their collective sigh of relief appears to have finally lifted stocks into the green.

The Dow rose 903 points or 2.7% on Wednesday afternoon.

The S&P 500 was up by 2.8%.

The Nasdaq grew by 2.9%.

Powell: I'm not one to give advice on inflation

Federal Reserve Chairman Jerome Powell is typically considered humble but not self-deprecating. He gave a small sense of his humorous side Wednesday when he hinted at how the Fed underestimated the extent to which inflation would rise.

“If Congress or the administration has ways to help with inflation, I would encourage that, but I’m not going to get into making recommendations or anything like that,” Powell said. “It is really not our role. We need to stay in our lane, and do our job. When we get inflation back under control, then maybe I can give other people advice.”

Fed rules out bigger rate hikes -- stocks surge

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4.

Stocks rose sharply after Federal Reserve Chairman Jerome Powell said the Fed wasn’t considering rate hikes any larger than Wednesday’s half-point increase.

“A 75 basis point increase is not something the committee is actively considering,” Powell said. “There is a broad sense on the committee that additional 50 basis increases should be on the table for the next couple meetings.”

Investors were most pleased. The Dow surged 600 points, or 1.8%. The S&P 500 was up 1.8% and the Nasdaq rose 1.6%.

Once inflation is in check, the Fed will continue hiking rates – but at more typical quarter-point levels, Powell said.

“It is not like we would stop,” Powell said. “We would just go back to 25 basis point increases.”

How the Fed thinks it can slow the economy without starting a recession

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4.

The Fed is purposefully trying to slow down the economy to keep inflation in check. But some economists worry the central bank was too late to the game and is now acting so quickly to catch up that it risks sending America’s economy into a recession.

Federal Reserve Chairman Jerome Powell said it won’t be easy, but the Fed thinks it could avoid that scenario.

That’s because America currently has an historically high number of job openings. That suggests demand for new hires could fall, Powell said, before workers get laid off.

The labor market is super strong and nowhere close to a downturn. Also consumer spending is strong, and businesses are in good financial shape.

“In principle, it seems as though by moderating demand, we could see vacancies come down, and as a result, they could come down fairly significantly, and I think put supply and demand closer together than they are at least, and that would give us a chance to have lower, to get inflation, wages down, and get inflation down, without having to slow the economy and have a recession, and have unemployment rise materially,” Powell said.

That gives the Fed a shot at a “soft or softish landing” – i.e. no recession. But it’s not certain.

“The economy is strong and is well-positioned to handle tighter monetary policy,” Powell said. “But I’ll say I do expect that this will be very challenging, it is not going to be easy.”

Jerome Powell: Inflation is much too high

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC, on May 4.

Federal Reserve Chairman Jerome Powell started his press conference today by speaking directly to Americans hurt by surging prices.

“I’d like to take this opportunity to speak directly to the American people,” Powell said. ” Inflation is much too high, and we understand the hardship it is causing. We are moving expeditiously to bring it back down. We have both the tools we need and resolve to restore price stability on behalf of American families and businesses. The economy and the country have been through a lot over the last two years and proved resilient. It is essential we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all.”

Get used to half-point hikes

Federal Reserve Chairman Jerome Powell said the Fed isn’t messing around with inflation. The central bank may have acted too slowly, many argue, but it is taking the threat seriously now and in the future.

Powell said half-point rate hikes like the one the Fed issued Wednesday could become the norm in the coming months.

“We are on a path to move our policy rate expeditiously to more normal levels,” Powell said. “Assuming that economic and financial conditions evolve in line with expectations, there is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings.”

All Fed members on board with size of latest rate hike

The Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC, on March 16.

The Federal Reserve clearly telegraphed Wednesday’s half-point interest rate hike. Investors would have been stunned if the Fed raised rates by a higher, or even lower, amount.

But some economists were prepared to see at least one Fed member (likely the super-hawkish St. Louis Fed president James Bullard) dissent from the decision and vote for a bigger rate increase.

That didn’t happen.

The decision to raise rates by “just” 50 basis points was unanimous. John Leer, chief economist at Morning Consult, said that was a surprise, given some of the rhetoric about inflation and the Fed being behind the curve.

Leer said that it seems the Fed wants to be more cautious with rate hikes because it does take time for higher rates to start impacting consumer spending.

“It’s one thing to see what bigger rate hikes do to stocks, but it’s another to see how this trickles down to the broader economy,” Leer said.

It does seem that Fed chair Jerome Powell is aware of this. During the press conference after the rate hike was announced, Powell said that even bigger rate hikes are “not something the [Fed] is actively considering.”

Stocks hold steady after Fed hikes rates

Investors were unsurprised by the Fed’s first half-point rate hike in 22 years. If anything, investors cheered the action the Fed took against surging inflation – and the fact that the central bank appears pleased with the state of the economy.

The Dow rose 120 points or 0.4%.

The S&P 500 was flat.

The Nasdaq fell 0.5%.

Fed raises rates by a half-point...as expected

Federal Reserve Board Chairman Jerome Powell speaks during a hearing on Capitol Hill on January 11 in Washington, DC.

Jerome Powell continues to operate from the Radiohead playbook. It was no alarms and no surprises from the Federal Reserve Wednesday. As expected, the central bank raised rates by a half-point, its first hike of that magnitude since 2000.

The vote to boost rates by that amount was unanimous. The Fed used the word “inflation” seven times in its statement, saying that inflation “remains elevated” and that Russia’s invasion of Ukraine “and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity.”

The Fed also announced that it plans to begin unwinding other stimulus measures as well. It will start in June to reduce its holdings in Treasury bonds and mortgage-backed securities. That move could also put upward pressure on long-term rates, which have nearly doubled this year.

Markets up slightly ahead of Fed announcement

US markets recovered from a slow start and turned higher on Wednesday afternoon as investors’ brace for what they assume will be a hawkish — but predictable — announcement by the Federal Reserve at 2pm.

The central bank is widely expected to raise interest rates by half a percentage point and announce a plan to cut its massive balance sheet of bond holdings in June.

The Dow is up 0.3%, or 115 points.

The S&P 500 has gained 0.2%.

The Nasdaq Composite is down by 0.4%.

Wordle = MONEY for The New York Times

The New York Times Building is seen in New York City on February 1.

Shareholders of The New York Times Company were seeing green Wednesday — and not just from the boxes for correct letter guesses in its wildly popular Wordle digital game.

The New York Times (NYT) was up 2% after the newspaper publisher reported earnings that topped forecasts due to strong subscription growth, particularly for digital. And the company credited its recent acquisition of Wordle.

Wordle, a highly addictive game that gives players six chances to correctly guess a five-letter word of the day, was bought by The New York Times earlier this year in a deal that valued the company “in the low seven figures.”

Although the game is free to play, The New York Times said interest in Wordle helped boost digital subscriptions. The company said subscription revenue from digital products increased 26.3% in the first quarter from a year ago, to $226.8 million. That’s more than 40% of overall sales.

“Wordle brought an unprecedented tens of millions of new users to The Times, many of whom stayed to play other games which drove our best quarter ever for net subscriber additions to Games,” said Meredith Kopit Levien, The New York Times CEO, in the earnings release.

She added that the company picked up 387,000 net digital subscribers in the quarter and now has 9.1 million total subscribers.

The company needs the BOOST (nice Wordle word!). Despite Wednesday’s gains, The New York Times’ STOCK (can’t help myself) is down 18% this year.

Analysts: It will be difficult for the Fed to out-hawk the market

Researchers at Bank of America say investors aren’t too worried about the outcome of today’s Federal Reserve announcement. The expected half-point rate hike and the announcement of quantitative tightening starting in June has been well telegraphed at this point, and should come as a surprise to no one, they wrote.

“It will be difficult to surprise in a hawkish direction as markets are pricing in an aggressive front-loaded tightening path,” said the note. “Overall, we would be surprised if this meeting is a market moving event.”

Investors will instead focus on signals of what could come in future meetings, whether that be a 75 basis point increase in June or any specifics on quantitative tightening plans.

A non-committal answer to plans for future rate hikes, however, could trigger market uncertainty and a downturn, wrote the analysts.

Biden says administration is on track to reduce deficit, which he predicts will reduce inflationary pressures

President Joe Biden speaks in the Roosevelt Room of the White House on May 4 in Washington, DC.

President Biden said his administration will reduce the deficit by what he called a record amount on Wednesday, the same day the Federal Reserve was widely expected to raise interest rates by half a percentage point, the biggest single move in 22 years. 

“This week, my administration released new information that we’re on track to cut the federal deficit by another $1.5 trillion by the end of this fiscal year, the biggest decline in a single year ever in American history,” Biden said in remarks from the Roosevelt Room. “Why is it important? Because bringing down the deficit is one way to ease inflationary pressures.” 

“We reduce federal borrowing, and we help combat inflation,” he said. 

Throughout his remarks, Biden attacked Republicans as the “MAGA Republicans,” as well as the Trump administration, which he said “increased the deficit every year was in office, in part because of a reckless $2 trillion tax cut.” 

Biden said that he “love[s] it” when Republicans talk about the deficit.

“I don’t want to hear Republicans talking about deficits and their ultra-MAGA agenda,” he said. “I want to hear about fairness. I want to hear about decency … about helping ordinary people. The bottom line is that for decades, the trickle-down economics has failed.” 

Uber and Lyft both tank after earnings

Uber posted a bigger loss than expected while rival ridesharing service Lyft warned that sales for its next quarter would be worse than what Wall Street had forecast. Shares in both companies plunged on the news Wednesday morning.

Uber (UBER) shares were down more than 10% while Lyft (LYFT) plummeted 34%.

Uber investors may have been spooked by comments from CEO Dara Khosrowshahi, who said on the company’s earnings call with analysts Wednesday that “gaining share isn’t a priority for us right now” because the company’s “focus is on profitable growth.”

The ridesharing business is highly competitive and Lyft is doing all it can to keep pace with Uber. Lyft said during its own earnings call late Tuesday that it plans to spend more on incentives and subsidies to attract drivers and is also boosting ad spending to lure more customers.

“We’re really focused on investing in drivers, the marketplace and a bit of marketing as well as we anticipate this continued comeback in demand,” said Lyft CFO Elaine Paul. “We believe that these investments in drivers and in other initiatives that are supporting our growth ultimately are going to pay off in the healthier marketplace.”

Wall Street clearly disagrees. Uber’s stock is now down 37% this year while Lyft shares have lost more than half their value in 2022.

US stocks fall ahead of Fed meeting

US stocks were mostly lower in the first hour of trading on Wednesday morning ahead of the Federal Reserve’s big announcement this afternoon where the central bank is expected to increase interest rates by a half percentage point. 

The Fed is also expected to announce it will reduce its $9 trillion in bond holdings at a pace of $95 billion per month. 

Lyft fell by 26% this morning after the company gave weak guidance for the second quarter yesterday. Airbnb grew by 3.6% and Starbucks by 2.4% after both companies beat revenue estimates.

The Dow was up 0.2%, and the S&P 500 fell 0.3% shortly after Wednesday’s open. The Nasdaq Composite fell 1%.

Prices in US services sector climb to new peak

Diners are served food at a restaurant in Philadelphia on April 18.

Rampant inflation and the persistent worker shortage is hitting America’s businesses hard. In April, an index tracking prices in the US services sector climbed to a record high, surpassing the prior peak set in December, according to data from the Institute for Supply Management.

While prices keep climbing higher, the labor shortage makes it hard for businesses to attract and retain staff.

That said, the services sector expanded for the 23rd straight month in April, even as it grew slightly less than analysts had expected. The purchasing managers index for the sector stood at 57.1% last month, 1.2 percentage points below March. New orders also declined, but business activity grew.

“Business activity remains strong; however, high inflation, capacity constraints and logistical challenges are impediments, and the Russia-Ukraine war continues to affect material costs, most notably of fuel and chemicals,” said Anthony Nieves, chair of the ISM Services Business Survey Committee.

Vaccine demand boosts Moderna and CVS

A healthcare worker fills up a syringe with a dose of Moderna's COVID-19 vaccine at the vaccination reference center in Zurich, Switzerland, on November 17, 2021.

Biotech Moderna reported solid earnings Wednesday and an upbeat outlook, thanks to strong sales of the company’s Covid-19 vaccine. Shares of Moderna (MRNA) were down slightly in early trading.

Moderna CEO Stephane Bancel reiterated during a conference call with analysts that the company expects to generate about $21 billion in vaccine sales this year.

Chief financial officer David Meline added that Moderna expects “the timing of sales to be larger in the second half of 2022 than in the first half” as the “virus will evolve into an endemic phase with a more seasonal sales pattern.”

Moderna rallied Tuesday after rival vaccine maker Pfizer (PFE) also posted healthy results. The push to vaccinate and boost millions of Americans is also helping drug store and insurance giant CVS.

CVS (CVS) reported strong financial results Wednesday. The company said in its earnings press release that it administered more than six million Covid tests and more than eight million vaccines during the first quarter of 2022.

Biden will address deficit reduction in economic remarks today

President Joe Biden departs Holy Trinity Catholic Church, in Washington, DC, on April 30.

President Biden is expected to address efforts to reduce the US deficit under his administration and tout broader economic success Wednesday in remarks on the economy.

He will discuss new projections from the Department of Treasury on the federal deficit for this fiscal year.

“This week, the Treasury Department issued revised estimates of the government’s financing needs for this fiscal year (ending at the end of September). Based on these estimates, the Administration projects that the deficit will fall by over $1.5 trillion this year – a revision up from the $1.3 trillion projected in the President’s Budget released earlier this year and the largest deficit reduction in a single year on record,” a White House official told CNN in a statement.

The official pointed “robust economic recovery” as the reason behind the reduction, including higher earnings and incomes, as well as the wind-down of emergency spending during the Covid-19 pandemic.

Biden will also tout new Treasury Department estimates that “it will pay down the national debt this quarter for the first time since 2016,” the official said, something that did not happen during the four years of the Trump administration.

The President is also expected to address efforts more broadly to lower costs amid the highest levels of inflation in decades, including a renewed push for his agenda to lower health care and prescription drug costs, as well as efforts to raise taxes on the wealthy.

“The President today will speak to this important news, and his commitment to reducing the deficit going forward while making critical investments to boost the capacity of our economy and lower costs for American families – essentials like prescription drugs, health care, and utility bills. The President has long believed that we can invest in the nation’s future and in working families in a fiscally responsible manner by asking the wealthiest Americans and large corporations to pay their fair share. This will boost the productive capacity of the economy and ease inflationary pressures in the economy,” the official said.

The Federal Reserve is expected to raise interest rates by half a point at the top of the 2:00 p.m. hour, with remarks by Chair Jerome Powell at 2:30 p.m. Biden is not expected to address the move, but if he does, he will reiterate that he respects the Fed’s independence, the official says.

Jamie Dimon: The Cold War is back and a recession is a real possibility

JPMorgan Chase CEO Jamie Dimon said Wednesday that the Federal Reserve should have moved sooner to raise interest rates and conceded the odds do not favor taming inflation without sparking a recession.

“We’re a little late but remember two years ago we had 15% unemployment and no vaccine. People should take a deep breath and give them a chance,” Dimon told Bloomberg TV. “The sooner they move the better.”

The JPMorgan (JPM) CEO added that the federal government needs to focus on national security in the wake of the war in Ukraine.

“The Cold War is back,” Dimon said. “Global energy is precarious…If oil goes to $185 that’s a huge problem for people and we should do everything we can today. We need to pump more oil and gas.”

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ADP Employment Report misses estimates

Even as America is moving closer to what the Federal Reserve calls “maximum employment”, today’s jobs data disappointed.

America’s private employers added only 247,000 jobs in April, the ADP Employment Report for April showed, far fewer than the 395,000 economists had forecast. Ouch!

While large and medium-sized companies added jobs last month, small businesses actually shed 120,000 positions, according to ADP. All sectors added jobs with the exception of information technology, where 2,000 positions were cut.

“While hiring demand remains strong, labor supply shortages caused job gains to soften for both goods producers and services providers,” said ADP Chief Economist Nela Richardson. “As the labor market tightens, small companies, with fewer than 50 employees, struggle with competition for wages amid increased costs.”

The ADP report comes ahead of the government’s official tally for April due on Friday morning. The two report are not correlated.

Warren Buffett-backed electric carmaker shrugs off China's lockdowns

BYD, the Warren Buffett-backed Chinese electric vehicle maker, had a bumper month in the world’s largest car market, despite strict Covid lockdowns that have disrupted production and sales for many of its major rivals.

The company reported Tuesday that its sales of electric vehicles and plug-in hybrids soared 313% in April from the same month a year ago. The Shenzhen-based carmaker sold a record number of 106,000 units last month in mainland China.

BYD was already off to a strong start to the year.

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The Fed is about to make history again

All eyes will be on the Federal Reserve Wednesday as it wraps up a crucial policy meeting in Washington, DC, the outcome of which will have repercussions for millions of American families and businesses, as well as the economy, ahead of the midterm elections.

For the first time in 22 years the central bank is expected to raise interest rates by a half-percentage point, part of a series of aggressive moves it’s anticipated to make in order to cool down the economy amid the worst inflation in 40 years.

In March, the Fed hiked its benchmark borrowing rate for the first time since late 2018, upping it by a quarter-percentage-point.

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EU proposes ban on Russian oil imports

The European Union is proposing to ban all oil imports from Russia by the end of the year and remove the country’s biggest bank, Sberbank, from the SWIFT international payments network.

European Commission President Ursula von der Leyen said Wednesday the measures would form part of a sixth round of sanctions against Russia over its invasion of Ukraine.

“We now propose a ban on Russian oil,” she said during a speech to the European Parliament. “Let’s be clear: it will not be easy. But we simply have to work on it. We will make sure that we phase out Russian oil in an orderly fashion, to maximize pressure on Russia, while minimizing the impact on our own economies.”

Crude oil supply would be phased out within six months, and imports of refined oil products by the end of 2022, she added.

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US stock futures rise ahead of Fed decision

US stock futures rose for the third straight day ahead of a consequential decision by the Federal Reserve. The Fed is expected to raise rates by a half point in a single move for the first time since 2000.

Dow futures were up 130 points or 0.4%.

S&P 500 futures rose 0.4%.

Nasdaq futures were 0.3% higher. 

US oil surged 3.5% to $106 a barrel.

A Chinese man called 'Ma' was detained. The news wiped $26 billion off Alibaba's stock

For Chinese tech tycoon Jack Ma, there’s a price to freedom: $26 billion.

Alibaba, the Chinese e-commerce giant Ma co-founded, saw its Hong Kong-listed shares plunge as much as 9.4% Tuesday after Chinese state media reported that an individual surnamed “Ma” in the city of Hangzhou — where Alibaba is based — had been detained on national security grounds.

According to China’s state broadcaster CCTV, the suspect was placed under “compulsory measures” on April 25 on suspicion of “colluding with overseas anti-China hostile forces” to “incite secession” and “incite subversion of state power.”

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Didi is facing an SEC probe into its botched IPO, company says

Didi says it is facing an investigation by US regulators into its botched IPO last year.

The Chinese ride-hailing giant said in a regulatory filing this week that it is cooperating with the investigation by the US Securities and Exchange Commission about its share offering, “subject to strict compliance with applicable [Chinese] laws and regulations.”

“We cannot predict the timing, outcome or consequences of such an investigation,” the company added.

The SEC didn’t immediately respond to requests for comment after business hours. Didi didn’t immediately respond to a request for comment.

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China market analyst quits after his social media accounts were frozen

Hong Hao, a prominent market analyst in China, has left the state-owned bank he worked for just days after his social media accounts were shut down following downbeat remarks he made about the economy.

Tencent’s (TCEHY) WeChat froze Hong’s public account over the weekend, after he posted about huge outflows of capital from the country and made bearish forecasts about the Chinese stock market.

Hong was managing director and head of research at BOCOM International, the Hong Kong-based investment banking arm of Bank of Communications, China’s fifth largest bank.

A spokesman for BOCOM International told CNN Business on Wednesday that Hong had resigned from the company for personal reasons.

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