Market in risky mode, PCE inflation, peace between Twitter and Apple

© Reuters.

By Geoffrey Smith — The dollar weakened as global markets joined the risk-on bandwagon that began with a speech by Federal Reserve Chairman Jerome Powell on Wednesday. US stocks remember that Powell didn’t really say much new. China is easing its COVID-19 regulations a bit, which is helping market risk-taking, but Europe’s economic outlook is more dire. The U.S. will release PCE inflation figures for October, as well as personal income and spending data, and Elon Musk said he’s making peace with Apple just as Congress prepares to impose peace on the rail sector. Here’s what you need to know in the financial markets this Thursday, December 1.

1. China relaxes quarantine rules and risk spreads worldwide

Global risk assets followed U.S. stocks higher, buoyed by a speech by Fed Chairman Jerome Powell, who repeated almost verbatim the guidance he gave at the end of the central bank’s last general policy meeting.

Speaking at the Brookings Institution, Powell said the Fed is likely to slow the pace of interest rate hikes at its meeting this month. That message was made more credible by the collapse of the Chicago Fed’s monthly Purchasing Managers’ Index, which suggests the US may be closer to a recession – and a decisive Fed turn – than the consensus thinks.

The riskier tone was helped overnight by further announcements of easing of COVID-19 controls in China, which will now allow some people to be quarantined at home rather than in mass isolation centers. . and a surprising rise in China’s manufacturing PMI.

2. US data: costs and revenues expected; PCE inflation and Challenger job cuts are expected

The US labor market continues to produce data with the monthly survey at 1:30 p.m. and one hour later. Unemployment figures showed a slowdown in the labor market in recent weeks, although a Labor Department survey showed there were still more than 1.5 job openings for every unemployed person in October.

The claims data is released alongside the October reading of the Price Index (the Fed’s preferred measure of inflation), which is expected to slow modestly from September.

Dallas Fed President Lori Logan and the Fed Governor will speak shortly after the data.

Figures released in Europe overnight were less encouraging, but did not stop the euro and pound from advancing against the dollar. It decreased in October, and November saw the biggest drop in more than two years.

3. Stocks breathe; Musk reconciles with Apple

US stock markets are expected to wake up later with a slight hangover after noting Powell’s remarks.

As of 1:20 p.m., it was down 99 points or 0.3%, 0.2% and 0.4%. These were small corrections from the 2.2% to 4.1% posted by the major spot indices on Wednesday. Profits in particular pushed it out of bear market territory.

Among the stocks to watch out for in particular is Salesforce (NYSE: ). It announced late Wednesday that co-CEO Bret Taylor will step down, leaving Marc Benioff as sole CEO. Salesforce shares lost more than 6% in premarket trading. Snowflake (NYSE: ) was also marked lower last night after disappointing numbers.

The focus will also be on Apple (NASDAQ: ) after Elon Musk said Twitter (NYSE: ) has resolved its differences with the iPhone maker and there is no risk of Twitter being removed from the Apple App Store.

4. Congress wants peace in railway dispute

The House passed a bill to end a long-running dispute between railroad operators and their union, using a 1926 law that allows Congress to intervene in such disputes if they disrupt the economy.

The House also added a proposal to approve seven days of paid sick leave for railroad workers.

Currently, trade unions are prevented from striking by a “cooling off” period that lasts until December 9. The administration warned that a nationwide rail strike would severely disrupt the automotive and food supply chains, as well as waste management.

the action of Union Pacific (NYSE:) hit a two-month high in trading after the market closed.

5. Oil prices hit one-month high on China hopes

Crude oil prices rose as hopes rose for a steady reopening of China’s economy in response to recent announcements by authorities.

Vice Premier Sun Chunlan, who is in charge of coordinating public health measures to combat COVID-19, admitted that the dominant strain, Omicron, was less pathogenic than previous ones, saying the fight had entered a “new phase”.

By 12:40 p.m., U.S. crude futures were up 1.2% at $81.51 a barrel, near a one-week high. Oil futures increased by 1.0% to $87.81 per barrel.

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