December S&P 500 futures (ESZ22) are trending up +0.32% this morning after three major US benchmark indices finished the regular session higher as market participants took an optimistic stance ahead of crucial U.S. inflation data that many hope would persuade the Federal Reserve and other central banks to step back from aggressive interest rate increases. Three major U.S. stock indexes were fueled primarily by gains in the Oil & Gas, Utilities, and Technology sectors.
In Monday’s trading session, three major U.S. indices received a boost from an over +2% gain in Microsoft Corporation (MSFT) shares, following the tech giant’s intentions to acquire a 4% stake in the London Stock Exchange Group (LSEG.LN). Also, energy stocks led the gainers as oil prices gained ground amid continued concerns about tightening supply as the Keystone pipeline between the U.S. and Canada remained closed.
Today, all eyes are focused on the U.S. consumer inflation report in a couple of hours. Economists, on average, forecast that November U.S. CPI will stand at +0.3% m/m and +7.3% y/y, compared to the previous values of +0.4% m/m and +7.7% y/y.
“That is one of the reasons why the market is feeling a little positive, because if you just take the overall CPI, if it gets down to another drop from 7.7%, there is a real trend there,” said Rob Conzo, a CEO and managing director of The Wealth Alliance in New York.
Also, investors are likely to focus on the U.S. Core CPI data, which was at +0.3% m/m and +6.3% y/y in October. Economists foresee the new numbers to be +0.3% m/m and +6.1% y/y.
At the same time, the further easing of inflation pressures is not expected to change the U.S. central bank's monetary policy plans. U.S. rate futures have priced in a 72.3% chance of a 50 basis point rate increase and a 27.7% chance of a 75 basis point hike at this week’s monetary policy meeting.
“Given the very close proximity of U.S. CPI data to the FOMC, it clearly has the ability to change the tone of the message ... but is highly unlikely to change the headline 50 bps hike,” Deutsche Bank said in a research note.
In the bond markets, United States 10-Year rates are at 3.604%, down -0.20%.
The Euro Stoxx 50 futures are up +0.20% this morning, with investors digesting a series of regional economic data ahead of the release of U.S. inflation data. The U.K. claimant count increased by 30.5K in November, weaker than expectations of 3.5K, while the unemployment rate stood at 3.7% in October, compared to 3.6% in the prior month, as the country’s labor market started to feel the backwash of the slowdown in consumer spending.
U.K. Average Earnings Index +Bonus, U.K. Employment Change 3M/3M, Germany's CPI, Italy's Industrial Production, Germany's ZEW Economic Sentiment, Germany's ZEW Current Conditions, and Eurozone ZEW Economic Sentiment data were also released today.
U.K. October Average Earnings Index +Bonus has been reported at 6.1%, weaker than expectations of 6.2%.
U.K. October Employment Change 3M/3M came in at 27K, stronger than expectations of -17K.
The German November CPI has been reported at -0.5% m/m and +10.0% y/y, in line with expectations.
The Italian October Industrial Production stood at -1.0% m/m and -1.6% y/y, weaker than expectations of -0.4% m/m and -0.1% y/y.
The German December ZEW Economic Sentiment came in at -23.3, stronger than expectations of -26.4.
The German December ZEW Current Conditions was at -61.4, weaker than expectations of -57.0.
Eurozone December ZEW Economic Sentiment stood at -23.6, stronger than expectations of -25.7.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.09%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.40%.
China’s Shanghai Composite today closed slightly lower as uncertainty over rising COVID-19 cases in the country following the dismantling of crucial parts of the government's zero-COVID policy weighed on the outlook for the world's second-biggest economy. China's fixed asset investment, industrial production, and retail sales data due later in the week are expected to shed more light on the economic impact of the country’s severe zero-COVID strategy.
At the same time, Japan’s Nikkei 225 Stock Index closed higher today, fueled by gains in the Shipbuilding, Gas & Water, and Financial Services sectors. The Nikkei Volatility, which takes into account the implied volatility of Nikkei 225 options, closed up 4.10% to 18.78.
Pre-Market U.S. Stock Movers
Magenta Therapeutics Inc (MGTA) jumped more than +43% in pre-market trading after the company announced positive MGTA-117 clinical data at ASH.
Oracle Corporation (ORCL) gained over +2% in pre-market trading after the company delivered stronger-than-anticipated Q2 results.
Mirati Therapeutics (MRTX) climbed about +10% in pre-market trading after the U.S. FDA granted accelerated approval for KRAZATI.
Norwegian Cruise Line Holdings Ltd (NCLH) dropped about -1% in pre-market trading after UBS downgraded the stock to neutral from buy with a price target of $19, down from $24.
Acm Research Inc (ACMR) soared about +25% in pre-market trading after the company introduced its Ultra Pmax Plasma-Enhanced Chemical Vapor Deposition tool.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Tuesday - December 13th
Siemens Gamesa ADR (GCTAY), Core Main (CNM), ABM Industries (ABM), Braze (BRZE), Planet Labs PBC (PL), Uranium Energy (UEC), Photronics (PLAB), Mitek (MITK), Daily Journal Corp (DJCO), Oramed (ORMP), Mesabi Trust (MSB), Byrna Technologies (BYRN), Uxin (UXIN), PHX Minerals (PHX), Avaya (AVYA), Vince (VNCE), Champions Oncology (CSBR).
More Stock Market News from Barchart
- Stocks Rally Ahead of Tuesday’s CPI Report
- Unusual Stock Options Volume Is Just What China’s Economy Needed
- Longer-Term Technical Indicators Remain Bearish on the Nasdaq
- Stocks Receive a Boost from M&A Activity
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
/Microsoft%20sign%20at%20the%20headquarters%20by%20VDB%20Photos%20via%20Shutterstock.jpg)
/2d%20illustration%20of%20Cloud%20computing%20by%20Blackboard%20via%20Shutterstock.jpg)