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Pressure on Trump, Fed Speakers, Merkel's Lockdown Warning - What's up in Markets

EconomyJan 12, 2021 06:53AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- The House will vote on asking Vice President Mike Pence to remove Donald Trump from the president’s office. A vote on impeachment is pencilled in for Wednesday in the (likely) event of Pence refusing. Angela Merkel warns Germany may need another 10 weeks of lockdown, while a raft of Fed speakers will flesh out thoughts of when the best moment to start tapering bond purchases may be. The American Petroleum Institute also releases weekly oil inventory data. Here’s what you need to know in financial markets on Tuesday, January 12th.

1. Democrats prepare to impeach Trump

The FBI warned of armed protests and potential violence across the U.S. over the next week, which will culminate in the inauguration of Joe Biden as president.

House Democrats are set to bring impeachment proceedings against outgoing President Donald Trump after Vice President delayed answering a call for him to remove Trump from office by invoking the 25th Amendment of the Constitution.  A motion formally calling on Pence to take action is due to be voted on today, with a vote on impeachment likely on Wednesday.

Elsewhere, right-wing social media site Parler said it will sue Amazon (NASDAQ:AMZN) for refusing to host its service with its Cloud unit AWS. Facebook (NASDAQ:FB) also announced on Monday that it will take down all content featuring the “Stop the Steal” slogan popularized by Trump after the November election.

2. Fed officials hint at year-end tapering of bond purchases

A suit of officials at the Federal Reserve hinted that they would be open to the idea of tapering the Fed’s bond purchases toward the end of the year. Richmond Fed President Tom Barkin, Atlanta’s Raphael Bostic and Dallas’ Robert Kaplan all indicated a degree of openness to winding down stimulus from the fourth quarter in various public appearances.

The yield on the 10-Year Treasury bond rose further in response overnight, to a new high for the year of 1.16%. That kept the dollar supported against the euro and other currencies.

There will be another barrage of Fedspeak on Tuesday, starting with Bostic again at 8:30 AM ET, followed by governor Lael Brainard at 8:35 AM. Bostic and Kaplan both speak at 11 AM ET, while the Cleveland Fed’s Loretta Mester and her Kansas City counterpart  Esther George speak at 12 PM and 1 PM respectively.

3. Stocks set to bounce; Steris/Cantel merger eyed

U.S. stock markets are set to open modestly higher, recouping some of Monday’s losses.

By 6:30 AM ET, Dow Jones futures were up 76 points or 0.3%, while S&P 500 futures were also up  0.3% and Nasdaq futures, which had the heaviest losses on Monday, were up by 0.4%.

Stocks likely to be in focus include, again, the social media companies that are now squarely in the middle of a new culture war over free speech and hate speech. Also of note will be medical device makers Cantel Medical (NYSE:CMD) and STERIS (NYSE:STE), whom The Wall Street Journal reported as being in merger talks.

4. Germany considers 10-week extension to lockdown; China outbreak reportedly eases

German Chancellor Angela Merkel is considering a 10-week extension to the country’s lockdown that would effectively ensure that Europe’s largest economy remains suppressed by anti-Covid-19 measures for the whole of the first quarter.

Germany’s infection rates had been improving in recent days, but still not quickly enough to satisfy a government that has done better than most in the west to contain the pandemic. Germany, with around one-quarter of the U.S.’s population, has registered only 41,000 deaths, compared to the U.S.’s 376,000.

Elsewhere, China reported a drop in new infections in the region of Hebei, easing concerns about the spread of the new Covid-19 variant there.  Japan’s Prime Minister Suga, meanwhile, indicated he may extend the current state of emergency in Tokyo to other prefecture including Osaka and Kyoto.

5 Oil rises ahead of API inventories

Crude oil prices rose to fresh 11-month highs, bolstered by a combination of factors ranging from faster rollouts of vaccines in the U.S. to expectations of a rebound in air travel in India and receding fears of lockdowns in China (which has been a rare bright spot for demand in recent months).

By 6:30 AM ET, U.S. crude prices were up 1.4% at $53.01 a barrel, while Brent futures were up 1.5% at $56.51.

At 4:30 PM ET, the American Petroleum Institute will report its weekly assessment of U.S. crude inventories. Last week’s figures were marked by the rare absence of imports from Saudi Arabia.

Pressure on Trump, Fed Speakers, Merkel's Lockdown Warning - What's up in Markets
 

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Comments (8)
مصطفی سلطانی
مصطفی سلطانی Jan 12, 2021 9:49AM ET
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Good
Bulls MakeMore
Bulls MakeMore Jan 12, 2021 9:18AM ET
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When you trample on the rights and values of 60% of Americans, the moral majority, and begin to force leftist socialism on America... ... ... we need to pray for a peaceful resolution, a healing and reuniting of America, hold on to the hope this could begin in 4 years, God-willing...this is a most fundamental crisis, a new civil war is a real possibility!
Bulls MakeMore
Bulls MakeMore Jan 12, 2021 9:18AM ET
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*at least 60% ... people need to realize there's a lot more to the U.S. than metro NY and California!
Dietmar Stahl
Dietmar Stahl Jan 12, 2021 9:03AM ET
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Trum. will be president in Germany after Merkel
Joel Graham
Joel Graham Jan 12, 2021 9:03AM ET
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I hope you’re just trolling with this comment smh
Dietmar Stahl
Dietmar Stahl Jan 12, 2021 9:03AM ET
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Trump will be president in Germany after Merkel
Yelen Shim
Yelen Shim Jan 12, 2021 8:06AM ET
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parler wants to sue Amazon?haha. what a joke.
Joe Conroy
Joe Conroy Jan 12, 2021 8:06AM ET
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What an intelligent response. I can tell that you put a lot of thought into it!
ryan reed
ryan reed Jan 12, 2021 8:06AM ET
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Someone needs to keep these tech giants in line. Not saying parler should be one of them tho.
Jay Jung
Jay Jung Jan 12, 2021 7:09AM ET
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market will be drop significantly before his speech and after also.today will be a very volatile to downside.
Jeffrey Vose
Jeffrey Vose Jan 12, 2021 7:07AM ET
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I think the best thing to come out of the Trump administration is how hes opened so many eyes to the insane amount corruption that is in our government.
joe balone
joe balone Jan 12, 2021 7:07AM ET
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let's not forget exposing the corrupt media.
Keith Whellans
Keith Whellans Jan 12, 2021 7:07AM ET
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Jeffrey Vose - Quite right, trump is undoubtedly insane & corrupt.
me ish
me ish Jan 12, 2021 7:07AM ET
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what it exposes is the ignorance of the US population. the mafia and CIA have been controlling the US for decades  - US citizens still mostly haven't got a clue what's going on with the media and TV generally just feeding them rubbish as is the food in the US. the average US citizen is so dreadfully educated and unaware of what's going on in their neighbouring town, let alone what's going on outside of the US and what the US has done to many countries around the world for their own greed - CIA are mafia, they own the media and the old powerful families such as Rockefellers and the bankers have just used you as slaves - in the so called land of the free. Trump is just from a different mafia family - it's a mafia war - he drained the swamp and then put in his own corrupt cronies - it's just a change of guard. no better, no worse. Wake up!
John Cash
John Cash Jan 12, 2021 7:07AM ET
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Yes. I never realized how corrupt the president was🤣
Malik Ali
Malik Ali Jan 12, 2021 7:06AM ET
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nice
 
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