Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. CPI, Chinese Easing Hopes, Record Hospitalizations - What's Moving Markets

EconomyJan 12, 2022 06:43AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. inflation is expected to have hit a 40-year high in December, testing the market's newfound confidence that the economy can cope with a stiff tightening of monetary policy. China's producer price inflation eases, giving the country's central bank more scope to protect its real estate and financial sectors. Biogen (NASDAQ:BIIB) stock slumps after a blow to the revenue prospects for its Alzheimer's drug, and the U.S. posted a record high number of Covid hospital admissions on Tuesday. There are also weekly data on U.S. oil stockpiles due. Here's what you need to know in financial markets on Wednesday, 12th January. 

1. Inflation, inflation, inflation

U.S. inflation figures for December at 8:30 AM ET (1330 GMT) will provide a stern test for a market that has rose for a second straight day after Federal Reserve Chair Jerome Powell chose not to drop any fresh bombshells in the Senate at his re-confirmation hearing on Tuesday.

Analysts expect the headline rate of consumer price inflation to hit 7.0% on the year, while the core CPI is expected to jump to 5.4% from 4.9% in November. The month-on-month headline and core rates, which will show a better picture of current dynamics, are expected to rise 0.4% and 0.5% respectively.  

The usual caveat will apply to the figures: the CPI is not the inflation measure that the Fed attaches most importance to, and pandemic-related distortions of spending patterns and seasonal adjustments also argue against reading too much into the figures. However, a 40-year high is still a 40-year high, whichever way it’s cut.

The phenomenon is by no means restricted to the U.S. The Organization for Economic Cooperation and Development said that inflation across the world’s advanced economies in general hit 5.8% in November.

2. China's central bank gets some relief from price pressure 

Anyone looking for signs of global inflation pressures easing can take comfort from China’s latest data, which showed consumer prices falling 0.3% in December and the annual rate of inflation falling to 1.5%. 

More importantly for global businesses and consumers, Chinese producer price inflation also eased to 10.3% on the year, clearly below forecasts for a more modest drop to 11.1%.

The figures suggest that the People’s Bank of China will have the leeway it needs in order to loosen monetary policy further to relieve the strain on a struggling real estate sector. Such hopes boosted everything from Hong Kong tech shares to Iron ore prices in China overnight, the latter also being helped by severe weather-related production outages in Brazil.

3. Stocks set to open mixed; Biogen in focus

U.S. stocks are set to open in a holding pattern later after two days of gains, with the overnight session in futures held in thrall by the CPI numbers.

By 6:20 AM ET, Dow Jones futures were up 42 points, or 0.1%, while S&P 500 futures were also up 0.1% and Nasdaq 100 futures were up 0.2%.

Stocks likely to be in focus later include Biogen, which slumped some 10% in premarket after regulators said that Medicare coverage of its Alzheimer’s drug aduhelm will be limited to patients enrolled in clinical trials. That’s the latest twist in a saga that exploded in controversy last year when the Food and Drug Administration approved the drug over the objections of some of its own senior experts.

Also in focus will be Meta Platforms (NASDAQ:FB) stock, after the Facebook (NASDAQ:FB) owner appointed DoorDash (NYSE:DASH) CEO Tony Xu to its board to help advise on its expansion into e-commerce.

4. U.S. Covid deaths rise to 3-month high; hospital admissions hit record high

The federal government will distribute free Covid-19 tests to schools in an effort to help them stay open, as the current wave of Omicron-variant disease exacts a high toll on teachers and students alike.

Hospitalizations due to Covid-19 in the U.S. leaped on Tuesday to their highest ever, a sharp setback for those who hoped that the reduced general severity of illness caused by Omicron would enable the economy to ride out the latest wave of infection smoothly. The number of Covid-related deaths in the U.S. also hit its highest since October.

Elsewhere, Quebec unveiled arguably the most radical policy to coerce people into getting vaccinated yet, saying it would impose a new tax on unvaccinated people. China, meanwhile, continued to tighten mobility restrictions, chiefly on air routes in and out of the country.

5. Oil pushes higher ahead of inventories data

Crude oil prices continued their ride higher after Jerome Powell’s comments at his confirmation hearing kept a soft tone on the dollar.

The U.S. government will release its weekly data for crude and product inventories at 10:30 AM ET as usual, a day after the American Petroleum Institute reported a 10 million barrel build in gasoline inventories (belatedly corroborating the government’s data from the previous week).

By 6:30 AM ET, U.S. crude futures were up 0.8% at $81.83 a barrel, while Brent futures were up 0.6% at $84.20 a barrel.

U.S. CPI, Chinese Easing Hopes, Record Hospitalizations - What's Moving Markets
 

Related Articles

Fed's Daly says she does not expect a recession
Fed's Daly says she does not expect a recession By Reuters - May 23, 2022 2

(Reuters) - San Francisco Federal Reserve Bank President Mary Daly on Monday said the U.S. economy has a lot of momentum, and said the central bank can raise interest rates to...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Malcolm Zellars
Malcolm Zellars Jan 12, 2022 7:49AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What does it all mean? Well, Bob, it means that once people stop spitting in each other's faces, this artificial economy will abate.
Marc Stellrecht
Marc Stellrecht Jan 12, 2022 7:10AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks Sleepy Joe! Still sleeping.
Itzhak ovadia
Itzhak ovadia Jan 12, 2022 7:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
intresting
David Lockshin
David Lockshin Jan 12, 2022 6:58AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for the good news.Inflation all time high, gas prices up, hospitalization all time high.... Have you seen my dog LUCKY.....
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email