Here are the most important news, trends and analysis investors need to start their trading day:
1. Wall Street poised to drop after hot inflation data, ahead of Fed meeting
Shares were higher on Monday morning as investors scrutinized retail sales and earnings results.
(Photo by Spencer Platt / Getty Images)
US equity futures extended Tuesday’s decline after another hot inflation report. On the first day of the Federal Reserve’s final two-day meeting, the government said November producer prices were up 9.6% year-over-year. It was the fastest pace ever and exceeded expectations.
- After last week’s strong performance, tech stocks were under pre-market pressure after leading the Nasdaq down 1.4% on Monday. The index finished 4% from its record close on November 19.
- The S&P 500, which closed at a record high on Friday, lost nearly 1% to enter the new week.
- The Dow Jones also fell nearly 1% on Monday, pushing the 30-stock average more than 2% from its all-time close on November 8.
2. CNBC survey: the Fed will stop asset purchases by March and hike rates in June
Investors remained cautious about how the Covid omicron variant might affect the economy and what the Fed might announce on Wednesday to fight rising inflation. The Fed will double the pace of its cut to $ 30 billion at its December meeting, which would end the $ 120 billion in monthly asset purchases by March, according to the latest CNBC Fed survey. The central bank will then hike rates three times in each of the next two years, starting in June 2022, according to the 31 survey respondents, which include economists, Wall Street strategists and fund managers.
3. Two studies reveal the Pfizer Covid pill, an effective vaccine against omicron
Pfizer said on Tuesday that the final analysis of its Covid antiviral pill still showed nearly 90% effectiveness in preventing hospitalizations and death in high-risk patients. Recent laboratory data also suggests that the drug retains its effectiveness against omicron. No one in the trial who received the Pfizer treatment died. In results of a large-scale study in South Africa released on Tuesday, Pfizer’s two-shot Covid vaccine provided 70% protection against hospitalization thanks to the new variant. The study was conducted in the weeks following the announcement of omicron in November by scientists from South Africa and Botswana.
The Senate should vote Tuesday to raise the federal government’s debt ceiling by $ 28.9 trillion, avoiding the risk of default later this month. Senate Republicans wanted to tie the increase in the borrowing limit to the $ 1.75 trillion domestic spending bill proposed by President Joe Biden, a measure they oppose.
Democratic Senator Joe Manchin has signaled that he is still not ready to support his party’s Build Back Better plan. West Virginia lawmaker spoke to Biden Monday, saying only that he and the President are “talking about different iterations” and that “anything is possible” when asked if they can come to an agreement by Christmas.
5. Actions in motion: GameStop, AMC, Apple, Tesla, Ford and MGM
- actions even GameStop and AMC Entertainment were under pressure again. GameStop fell nearly 14% to $ 136.88 on Tuesday, its lowest close since March. AMC fell 15% to $ 23.24, its lowest close since late May.
- Apple dipped slightly in pre-market, a day after it nearly turned into a $ 3 trillion company, before shares closed down 2%.
- Tesla – up about 35% in 2021 – fell 2% on Tuesday morning after CEO Elon Musk sold $ 906.5 million in additional shares.
- Ford fell 2%, hit by Toyota’s plan to invest $ 35 billion in battery-electric vehicles, an area in which Ford wants to establish itself as a leader.
- MGM Resorts fell 1% the morning after announcing it would sell the operations of the Mirage hotel and casino in Las Vegas in Hard Rock for more than $ 1 billion in cash.
– Reuters and The Associated Press contributed to this report. Follow all market actions like a pro on CNBC Pro. Get the latest pandemic news with CNBC’s coronavirus coverage.