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General Motors, OPEC Meeting, Beige Book: 3 Things to Watch

Stock MarketsDec 01, 2021 03:54PM ET
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© Reuters

By Sam Boughedda -- Stocks got off to a flying start on Wednesday but turned sharply negative late in the session after U.S. public health officials announced they had found the first confirmed case of the Covid-19 Omicron variant.

The case, found in California, was described as mild but symptomatic. The person is fully vaccinated and said to be isolating and improving. The Centers for Disease Control and Prevention said the person had recently returned to the U.S. from South Africa.

U.S. health officials stressed that there was still a need to wait for further data to determine how transmissible and how effective the new strain is at evading current vaccines.     

On the jobs front, private payrolls rose 534,000 in November, according to ADP. That was less than October but more than expected. The report comes just a couple of days before the much anticipated government jobs report on Friday. 

In his second day of testimony on Capitol Hill, Fed Chair Jerome Powell repeated what he said Tuesday: Speeding up the taper of bond purchases would be on the central bank’s agenda at the December meeting, but he added that there was no reason for faster taper to be disruptive to markets.

Here are three things that could affect markets tomorrow:

1. General Motors

General Motors Company (NYSE:GM) now expects full year adjusted pre-tax profits will reach about $14 billion, higher than the $11.5 billion to $13.5 billion previously forecast. The automaker, which is making a pivot to electric vehicles, announced a joint venture on Wednesday with South Korea’s POSCO (NYSE:PKX) Chemical to build a factory in North America to process critical battery materials for GM's Ultium electric vehicle platform. 

The factory will process Cathode Active Material (CAM), a key battery material that represents about 40% of the cost of a battery cell — a move from GM to take control of its supply chain and minimize disruptions after recent issues that saw a shortage of semiconductor chips.

2. OPEC meeting

Crude oil futures pared gains on Wednesday, held down by growing concerns about travel amid a new variant of Covid-19 that is spreading around the globe. On Thursday the cartel of major oil producing nations will meet to decide on production for January, after agreeing they would only gradually add supply to the market. The Biden administration could adjust the timing of its planned release of strategic reserves of oil if global energy prices drop substantially, U.S. Deputy Energy Secretary David Turk told Reuters on Wednesday.

3. Beige book

The U.S. economy continued to come under pressure from supply chain disruptions, labor shortages, and inflation but businesses were able to hike prices to offset price pressures amid strong consumer demand, according to the Federal Reserve's Beige Book released Wednesday.

"Economic activity grew at a modest to moderate pace in most Federal Reserve Districts during October and early November, "the Fed said in its Beige Book economic report, based on anecdotal information collected by the Fed’s 12 reserve banks through Nov. 23.  "[G]rowth was constrained by supply chain disruptions and labor shortages."

--Yasin Ebrahim and Reuters contributed to this report


General Motors, OPEC Meeting, Beige Book: 3 Things to Watch

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