Here are the most important news, trends and analysis that investors need to start their trading day:
Wall Street looks stable after two-session tech rebound
December consumer prices likely to continue to be hot
Fed chief Powell says tighter policy needed to control inflation
Omicron may be headed for a rapid drop in Britain, the U.S.
Biden sending more Covid tests to schools to keep them open
1. Wall Street looks stable after two-session tech rebound
U.S. stock futures were little changed Wednesday ahead of a key inflation report. The Nasdaq on Tuesday rallied for the second session as tech stocks continued to rebound. The index gained 1.4% as bond yields stabilized, taking some pressure off growth-orientated names, which appeared to have found their footing after a rough start to the new year. The S&P 500 rose nearly 1%, breaking a five-session losing streak. The Dow Jones Industrial Average gained 0.5%, ending a four-session down streak. The S&P 500 and the Dow on Tuesday finished nearly 1.8% and 1.5% away, respectively, from their record closes last week. The Nasdaq ended 5.6% away from its November record close.
2. December consumer prices likely to continue to be hot
The government’s December consumer price index, set for release at 8:30 a.m. ET, is expected to show an increase of 7% year over year. That would be slightly higher than November’s year-over-year 6.8% gain, the hottest increase since 1982.
Core CPI, which excludes food and energy, is seen rising 5.4% year over year in December, compared with the prior month’s 4.9% gain. The 10-year Treasury yield on Wednesday dipped to around 1.74% ahead of the data following a spike this year to over 1.8% earlier this week.
3. Fed chief Powell says tighter policy needed to control inflation
Federal Reserve Chairman Jerome Powell, with a seemingly clear path to a second term heading the central bank, declared on Tuesday the U.S. economy is both healthy enough and in need of tighter monetary policy to control inflation. That will likely mean interest rate hikes this year, tapering of monthly asset purchases and reducing the Fed’s balance sheet. Powell made the comments during his confirmation hearing, during which key senators indicated they will be supporting him for a second term.
4. Omicron may be headed for a rapid drop in Britain, the U.S.
Scientists are seeing signals the rapidly spreading Covid omicron variant may be have peaked in Britain and may be ready to do the same in the U.S. Omicron has proved so contagious that it may already be running out of people to infect, just a month and a half after it was first detected in South Africa. The University of Washington’s own highly influential model projects the number of daily reported cases in the U.S. will hit 1.2 million by Jan. 19 and then start to fall sharply. The latest seven-day average of new daily infections was 747,267, according to a CNBC analysis of Johns Hopkins University data.
5. Biden sending more Covid tests to schools to keep them open
The White House is increasing federal support for Covid testing for schools in a bid to keep them open as the omicron variant rips across the U.S. The Biden administration announced Wednesday it’s making a dedicated stream of 5 million rapid tests and 5 million lab-based PCR tests available to schools starting this month. The effort is aimed at easing supply shortages and promoting safety in schools. That’s on top of more than $10 billion devoted to school-based tests authorized in the Covid relief law.