Tuesday December 13th


Stock futures rise as investors await key November inflation report

U.S. stock index futures rose Tuesday as Wall Street braced for November’s key inflation report and the beginning of the Federal Reserve December policy meeting. Futures tied to the Dow Jones Industrial Average gained 197 points, or 0.57%. S&P 500 and Nasdaq-100 futures added 0.53% and 0.55%, respectively. Investors are looking ahead to the release of November’s consumer price index report, and hoping for signs of easing inflation. Economists surveyed by Dow Jones expect a 0.3% increase on a monthly basis or an annual pace of 7.3%. That would be a step down from October’s 0.4% monthly increase and annual gain of 7.7%. Tuesday’s inflation report could play a key role in the Federal Reserve’s next rate-hiking decision expected at the conclusion of its two-day policy meeting on Wednesday. Traders are largely pricing in a 50 basis point increase, a slight decline from the previous four hikes. They will also monitor updated economic projections and commentary out of Chair Jerome Powell’s press conference for signs of a potential policy pivot as fears of a recession linger on Wall Street. Monday’s overnight moves follow a solid session for all the major averages after a tough down week. The Dow gained more than 528 points, or 1.58%, while the S&P and Nasdaq rose 1.43% and 1.26%, respectively. All S&P 500 sectors finished with gains, led to the upside by energy stocks, which rose as oil prices gained. “I think this is a reflection of what’s anticipated out of the CPI number tomorrow, and a hope that the Fed will confirm a 50 basis point raise on Wednesday,” said Kevin Philip, partner at Bel Air Investment Advisors. “I think the market, as it’s done before, is banking, in my opinion, a little too heavily on some sort of Fed pivot and this bounce we got today is fragile at best.” Asia-Pacific shares opened in positive territory as investors look ahead to a highly anticipated Federal Reserve meeting and U.S. CPI data reading. Hong Kong’s Hang Seng index was up 0.67% after Chief Executive John Lee announced further easing of Covid restrictions. Australia’s S&P/ASX 200 closed up 0.31% at 7,203.3. The Nikkei 225 in Japan added 0.40% to close at 27,954.85, while the Topix inched up 0.43% to 1,965.68. Korean benchmarks Kospi and Kosdaq dropped fractionally to close at 2,372.4 and 715.16 respectively. In mainland China, the Shenzhen Component shed 0.174%, while the  Shanghai Composite climbed 0.07%. Oil rose Tuesday on supply disruptions and as Covid restrictions eased in China, the world’s largest crude importer. Brent crude futures were up 71 cents, or 0.9%, to $78.70 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 42 cents, or 0.6%, to $73.59. Gold prices rose slightly on Tuesday as investors held back from making large bets ahead of U.S. inflation data and the Federal Reserve’s rate-hike decision. Spot gold was up 0.3% at $1,787.22 per ounce. U.S. gold futures edged 0.4% higher to $1,798.70. The dollar index was down 0.1%, making greenback-priced bullion more appealing to buyers holding other currencies.