Here are the most important news, trends and analysis that investors need to start their trading day:
Wall Street set to drop after hot inflation data, ahead of Fed meetingCNBC survey: Fed will halt asset purchases by March, hike rates in JuneTwo studies reveal Pfizer Covid pill, vaccine effective against omicronSenate to vote on debt ceiling as Manchin holds out on Biden spendingStocks on the move in premarket include Apple, Tesla, Ford and MGM Resorts
1. Wall Street set to drop after hot inflation data, ahead of Fed meeting
Stocks were up in morning trading on Monday with investors looking at retail sales and earnings results.
(Photo by Spencer Platt/Getty Images)
U.S. stock futures extended Tuesday’s decline after another hot inflation report. On the first day of the Federal Reserve‘s final, scheduled two-day meeting of the year, the government said November producer prices soared 9.6% year over year. That was the fastest pace on record and higher than expectations.
Following last week’s stellar performance, tech stocks were under pressure in the premarket after leading the Nasdaq lower by 1.4% on Monday. The index finished 4% away from its Nov. 19 record close.The S&P 500, which closed at a record Friday, lost nearly 1% to start the new week.The Dow also fell close to 1% on Monday, pushing the 30-stock average more than 2% away from its Nov. 8 record close.
2. CNBC survey: Fed will halt asset purchases by March, hike rates in June
Investors remained cautious about how the Covid omicron variant could affect the economy and what the Fed might announce Wednesday to combat rising inflation. The Fed will double the pace of its taper to $30 billion at its December meeting, which would roughly end the $120 billion in monthly asset purchases by March, according to the latest CNBC Fed Survey. The central bank will then hike rates three times in each of the next two years, starting in June 2022, according to the survey’s 31 respondents, who include economists, Wall Street strategists and money managers.
3. Two studies reveal Pfizer Covid pill, vaccine effective against omicron
Pfizer said Tuesday that final analysis of its antiviral Covid pill still showed near 90% efficacy in preventing hospitalizations and deaths in high-risk patients. Recent lab data also suggested the drug retains effectiveness against omicron. Nobody in the trial who received the Pfizer treatment died. In results of a large-scale study in South Africa released Tuesday, Pfizer’s two-shot Covid vaccine provided 70% protection against hospitalization from the new variant. The study has been conducted in the weeks since omicron was first announced in November by scientists in South Africa and Botswana.
4. Senate to vote on debt ceiling as Manchin holds out on Biden spending
The Senate is expected to vote Tuesday to raise the federal government’s $28.9 trillion debt ceiling, avoiding the risk of an default later this month. Senate Republicans wanted to link the borrowing limit hike to President Joe Biden‘s proposed $1.75 trillion Build Back Better domestic spending bill, a measure they oppose.
Democratic Sen. Joe Manchin has signaled he’s still not ready to back his party’s Build Back Better plan. The West Virginia lawmaker spoke to Biden on Monday, saying only that the president and he are “talking about different iterations” and that “anything’s possible” when asked if they could reach a deal by Christmas.