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Fed Outlook, Oil Prices, Chinese Stocks: 3 Things to Watch

Stock Markets Jan 05, 2022 03:50PM ET
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© Reuters.

By Sam Boughedda

Investing.com -- Stocks tumbled Wednesday afternoon after the Federal Reserve signaled it might be more aggressive in combating inflationary pressures with rate hikes as it eases off its stimulus. 

Already investors were expecting rate hikes as early as March, pushing Treasury yields higher this week. Wednesday’s private payrolls report, which comes a couple of days before the government’s monthly employment report, showed companies added 807,000 jobs last month. That was more than twice the number that economists had forecast.

Tech stocks slumped because rising inflation tends to dampen the prospects for growth companies, but the broader index also fell as did blue chip stocks.

Thursday brings the weekly jobless claims for the previous week, another gauge used by investors to measure progress in the recovery.

Here are three things that could affect markets tomorrow:

1. Fed outlook

After their meeting last month, Federal Reserve officials called the labor market “very tight" and signaled it may need to raise interest rates sooner than they might have earlier last year.

"It may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated. Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate," the minutes said.

2. Oil market

Oil rose for a third-straight day after unexpectedly large builds in fuel stockpiles.

While crude stockpiles fell by 2.114 million barrels last week, the Energy Information Administration, or EIA, said on Wednesday. Analysts tracked by Investing.com had expected a draw of 3.283 million barrels instead.

Gasoline stocks jumped by 10.128 million barrels last week, the EIA said, compared with expectations for a rise of 1.775 million. Historical EIA showed that to be the largest weekly surge in gasoline stocks since April 2020, during the height of the coronavirus crisis. 

3. Chinese stocks

ADRs and stocks of Chinese companies traded weaker as China's cyber regulatory body issued draft rules Wednesday that, if implemented, will mean a heavier compliance burden for apps whose functions are perceived as influencing public opinion.

In an unrelated development, but one which still reflects the tightening of oversight of China’s internet giants, the country’s markets regulator fined units of Alibaba Group Holdings Ltd ADR (NYSE:BABA), Tencent Holdings Ltd ADR (OTC:TCEHY), and Bilibili Inc (NASDAQ:BILI) for failing to properly report about a dozen deals.

–Investing.com staff and Bloomberg contributed to this report

 

 

Fed Outlook, Oil Prices, Chinese Stocks: 3 Things to Watch
 

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Comments (8)
Jason Lebron
Jason Lebron Jan 05, 2022 9:28PM ET
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1. Don't buy Chinese stocks, instead sell them...2. Rates won't go up in 2022...3. With so many people out of work because of the new flu/Omicron I won't be surprised to see jobless claims go up for a few weeks.
Jason Lebron
Jason Lebron Jan 05, 2022 9:26PM ET
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1. Don't buy Chinese stocks, instead sell them.2. Rates won't go up in 20223. With so many people out of work because of the new flu/Omicron I won't be surprised to see jobless claims go up for a few weeks.
Rob Omes
Rob Omes Jan 05, 2022 6:52PM ET
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I believe Tencent closing positions has a lot of influence on the Chinese market lately
Rob Omes
Rob Omes Jan 05, 2022 6:51PM ET
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I believe Tencent closing positions has a lot of influence...
Lonnie Shelton
Lonnie Shelton Jan 05, 2022 6:39PM ET
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information exchange has become so fast along with the ability to buy/sell stocks. EVERYTHING is so knee jerk lately that honestly.... who knows what the true impact to the market will be. the only thing that is known is that things will continue to change exponentially fast. maybe at some point, reason will align with the speed of change? maybe)
Kent Beason
Kent Beason Jan 05, 2022 6:38PM ET
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BABA et al were fined a laughable $78k each. Detail worth mentioning I think lol.
Lonnie Shelton
Lonnie Shelton Jan 05, 2022 6:34PM ET
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nothing makes sense anymore.
Partap Singh
Partap Singh Jan 05, 2022 4:26PM ET
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happy to read
 
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