By Geoffrey Smith
Investing.com -- The FDA will release a data dump on Moderna’s (NASDAQ:MRNA) stage three vaccine trial. The EU laid out plans to regulate Big Tech more tightly; stocks are set to break a four-day losing streak as the Fed starts a two-day meeting, and oil prices withstand another downward revision to global demand for next year. Here’s what you need to know in financial markets on Tuesday, December 15th.
1. FDA to release Moderna data assessment
The U.S. Food and Drug Administration will release its analysis of data from the stage 3 trial of Moderna’s Covid-19 vaccine, a preliminary step toward the granting of emergency use authorization, which may come by the end of the week.
The release comes a day after New York City Mayor Bill de Blasio warned that the city may have to return to a full lockdown due to rising infection rates. “We're seeing the kind of level of infection that we haven't seen since May, and we have got to stop that momentum or else our hospital system will be threatened," de Blasio told CNN.
Tuesday’s data showed no let-up in the rates of deaths and hospitalizations due to Covid-19, with Johns Hopkins data showing the U.S. death toll passing 300,000.
2. EU moves on Big Tech
The European Union added to Big Tech’s regulatory woes, publishing draft regulation on digital services and markets with provisions allowing it to break up companies if they repeatedly offend.
While the draft is likely to be revised significantly as it passes through the European decision-making process, it highlights the direction of travel for regulation of the major Internet platform companies, which are already facing tougher antitrust scrutiny in the U.S.
The EU wants to be able to force the separation of companies’ businesses, separating – for example – the Whatsapp and Instagram services from Facebook (NASDAQ:FB) – if they are fined under the new laws three times within five years, according to the Financial Times. The fines foreseen are up to 10% of global revenue, in line with broader EU antitrust policy.
3. Stocks set to break four-day losing streak
U.S. stock markets look set to break a four-day losing streak later, with the futures contracts for all three major indices trading higher in the overnight session. Concerns about the ever-tighter lockdown across the U.S. is being balanced by residual belief in some form of fiscal stimulus being passed by the end of the week.
There is also a modicum of hope that the Federal Reserve may also support markets by expanding its bond purchases when it concludes the policy meeting that starts later Tuesday, although the consensus forecast is for no change to the policy stance.
By 6:30 AM ET (1130 GMT), Dow Jones futures were up 150 points, or 0.5%, while S&P 500 futures were up 0.6% and NASDAQ Futures were up 0.4%.
Stocks likely to be in focus later include Pinterest (NYSE:PINS), which agreed to pay $22 million to settle a gender discrimination lawsuit on Monday; Boeing (NYSE:BA), against a backdrop of fresh concerns about its 787 aircraft, and Twitter, which was fined half a million dollars by the EU for tardy communication about a data breach. Volkswagen (OTC:VWAPY) ADRs may also see some interest: the stock rose 5% in Europe after CEO Herbert Diess won a power struggle with unions at a key board meeting on Monday.
4 Chinese economy hits cruise control
The Chinese economy has reached cruise control. Industrial production and retail sales continued to grow in November, underlining the country’s status as the only major world economy likely to grow this year, but the rate of improvement has flattened out in the last couple of months. Industrial production growth stalled at 7% on the year, while retail sales growth accelerated modestly to 5.0%, below expectations.
That growth has come with some problems attached: China's central bank earlier made its biggest ever injection of medium-term funds into the financial system - some 950 billion yuan ($145 billion) - to shore up confidence in a market buffeted by some big local bond defaults.
U.S. industrial production data for November are due at 8:15 AM ET, and they’re also expected to show a slowdown from October’s 1.1% gain. The year-on-year drop in October was 5.3%. Redbook Research’s latest update on the retail sector is due at 7:55 AM ET.
5. Oil prices absorb IEA demand warning
The International Energy Agency trimmed its forecast for global oil demand by 100,000 barrels a day, but still said it expected a robust recovery in global demand in 2021, resulting in average demand of 96.9 million barrels a day.
The think-tank said that demand would stay lower for longer than previously expected due to the latest wave of the pandemic, which has seen Germany, Italy, London and New York all adopt tighter restrictions on economic life this week.
It also said global oil inventories will end the year 625 million barrels higher than at the start of the pandemic, underlining how much surplus production from the last nine months still has to be consumed.
Oil futures were sanguine, having absorbed a more bearish report from OPEC on Monday. U.S. and Brent crude futures were essentially flat at $47.02 a barrel and $50.71 a barrel respectively.