FILE PHOTO: A customer exits after picking up a new Apple iPhone 12 5G that went on sale as the coronavirus disease (COVID-19) outbreak continues, at an Apple Store in Brooklyn, New York , USA October 23, 2020. REUTERS / Brendan McDermid / File photo
December 14, 2021
Looking back on a day ahead from Sujata Rao.
The markedly flattened US yield curve – with long-term borrowing costs falling – failed to lift tech shares on Monday. Instead, as the Omicron COVID variant collects steam, consumer staples, pharmaceuticals, and other protective items benefit, driving Apple to a $3 trillion market cap. .
With Wall Street futures surging and Frankfurt-listed shares of Apple up nearly 1%, Tuesday could be the day to hit the milestone.
But in a week heavy with central bank meetings, hawkish data and expectations, anyone can guess how the market plays out.
Meanwhile, the Bank of England dilemma – to rise or not to rise – has not gone away. The November payrolls increase was the biggest since tax agency filings began in 2014, suggesting the labor market has withstood the end of the growth plan.
Online supermarket Ocado also provides an overall picture of the UK job market with a 3.9% drop in quarterly revenue due to labor shortages.
But with the spread of Omicron triggering work-from-home advice and other restrictions, the BoE will likely choose to delay Thursday.
Also track US factory prices – a reliable futures indicator for CPI – later. Polls predict that at the start of the year below 2%, the November PPI will be above 9%.
That data is unlikely to shake confidence that the Federal Reserve, which begins its two-day meeting on Tuesday, will accelerate the process of tapering stimulus and the dot chart of voting intentions of the rate-setters would indicate a more hawkish turn than the previous meeting.
That kept the dollar index at a one-week high and equity futures higher. For now, let’s focus on emerging markets, where the rate hike campaign continues unabated – Hungary is expected to raise rates by 30 basis points and Chile by up to 125 basis points. (Graphic: Apple, https://fingfx.thomsonreuters.com/gfx/mkt/znvnexqbypl/Pasted%20image%201639431347480.png)
Key developments that will provide more direction for the market on Tuesday:
OPEC upbeat on oil demand in 2022, says Omicron impact is mild
-Musk sells Tesla shares worth $906.5 million
-European industrial zone produced in November
-Economic Outlook of the Ifo Institute of Germany
-European Income: Ocado, Purple Brick
(Reported by Sujata Rao; edited by Dhara Ranasinghe)
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