Latest News

Wall St turns bullish ahead of inflation data, Fed action


Wall Street positive ahead of inflation data, Fed action By Reuters

Breaking News


Economy 52 minutes ago (Dec 12, 2022 19:25)

© Reuters. FILE PHOTO: People pass by an electronic screen showing Japan’s Nikkei share price index inside a commercial building in Tokyo, Japan September 22, 2022. REUTERS/Kim Kyung-Hoon

By Lawrence Delevingne

(Reuters) -Global stocks, oil prices and the dollar rose on Monday as investors awaited the last round of transatlantic central bank interest rate hikes this year, hoping that the now-hefty pace of increases in borrowing costs will finally show signs of easing.

The Dow Jones Industrial Average was up nearly 1%, the S&P 500 gained 0.6%, and the Nasdaq Composite rose about 0.4%. Wall Street’s main indexes got a boost from a 2% rise in shares of Microsoft Corp (NASDAQ:MSFT), following the software maker’s plans to buy a 4% stake in the London Stock Exchange Group (LON:LSEG).

After a multi-week decline, oil prices jumped as a key crude pipeline supplying the United States closed and Russia threatened a production cut, even as China’s loosening COVID-19 restrictions bolstered the fuel demand outlook. [O/R]

The dollar edged up as data last week – that showed U.S. wholesale inflation rose more than expected last month – reinforced the view the Federal Reserve may have to keep interest rates higher for longer.

The U.S. consumer price index (CPI) for November is due on Tuesday, when a slowdown in core annual inflation is anticipated.

“A heavy event risk calendar this week stands to define the core themes for 2023,” ING bank said.

Market consensus was still “underappreciating” the risk of inflation staying higher longer, and “dangerously second-guessing” the Fed in terms of rate cuts in the second half of next year, ING said.

The MSCI all country stock index was virtually flat on the day, still down about 18% so far this year, wiping out all gains from 2021.

In Europe, the STOXX index of 600 companies was down about 0.5% as investors awaited interest rate moves.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1.4%, erasing almost all of the previous week’s gains stemming from optimism that China is finally opening up its economy with the dismantling of its zero-COVID policy. Japan’s Nikkei eased 0.2%.


Economists expect the Fed on Wednesday, and the European Central Bank and Bank of England on Thursday, to all raise rates by 50 basis points – slowing down from the 75 basis point hikes seen in recent meetings.

Patrick Spencer, vice chair of equities at Baird investment bank, said central banks will start taking a less aggressive stance this week, though Tuesday’s CPI data will be critical.

“It’s the last important week of the year, after this week you’ve got no real sort of catalysts. If the CPI is a muted number, we’re off to the races and we’ll get our year-end rally,” Spencer said.

But irrespective of the CPI, deflationary pressures are increasing, with crude oil prices down for the year, and iron ore, lumber and house prices also down, Spencer said.

“All this talk of recession, I think it is certainly in the price, it’s in the markets. The key about recession is generally employment, and I think employment is going to be stronger than people give it credit,” Spencer said.

While the Fed is widely expected to raise rates by 50 basis points on Wednesday at its last meeting of 2022, the focus will also be on the central bank’s updated economic projections and Fed Chair Jerome Powell’s press conference.

“This week’s focus is likely to be centered on CPI and the Fed. To us, that is yesterday’s news,” Morgan Stanley (NYSE:MS) market strategists wrote in a note on Monday.

“While it’s important for … year-end trading ranges, the final chapter to this bear market is all about the path of earnings estimates, which are far too high, in our view.”


In currency markets, the dollar index was slightly higher at $105.15, not far from the five-month trough of $104.1 hit a week ago. The euro was also flat at $1.0521.

Treasury yields also showed little movement. The yield on 10-year Treasury notes was up just 4.2 basis points at 3.609% and the yield on 30-year bonds was up 2.3 basis points at 3.573%. Two-year yields, which typically move in step with interest rate expectations, rose 7 basis points to 4.401%.

U.S. crude rose 2.9% to $73.07 per barrel and Brent was at $77.84, up 2.3% on the day.

Gold prices declined. Spot gold dropped 1% to $1,779.63 an ounce. U.S. gold futures also fell nearly 1% to $1,780.50 an ounce.

Wall Street positive ahead of inflation data, Fed action

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

© 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Oracle Quarterly Results Beat Estimates On Top And Bottom Lines

Previous article

U.S. dollar rises vs most currencies ahead of inflation data, Fed meeting

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News