Stocks futures move higher following Monday’s storming tech rally; Powell faces re-nomination hearing in Washington; Fed’s Clarida steps down amid trading controversy; Tesla sees record December sales and Pfizer says it can have an Omicron-focused vaccine ready by March.
Here are five things you must know for Tuesday, January 11:
1. — Stock Futures Higher After Storming Tech Stock Rally
U.S. equity futures nudged higher Tuesday, following on from the strongest late-session rally for tech stocks in nearly two years, as investors continue to grapple with inflation concerns that are compounded by a worrying surge in global Covid infections.
The Nasdaq rallied hard late Monday, after falling into so-called correction territory, a level defined as a 10% slide from a recent peak, during the trough of yesterday’s session. The tech-focused benchmark finished modestly higher, however, thanks to a near 3% single-day turnaround, the strongest rally since March of 2020.
Similar gains may be difficult to sustain Tuesday, with Federal Reserve Chairman Jerome Powell set to appear before the Senate Banking Committee later this morning and December inflation data looming Wednesday. but the turnaround has nonetheless steadied nerves on Wall Street heading into the start of the third quarter earnings season later this week.
Omicron’s relentless wave, however, continues to sweep over the world’s largest economy, with daily infections hitting a record 1.35 million yesterday, lifting the seven-day average to around 700,000 — a level last seen in January of 2021 — raising concerns that growth will be difficult to maintain in the face of business closures, travel restrictions and self-isolations.
Still, Wall Street looks set for solid opening bell gains Tuesday, with futures contracts tied to the Dow Jones Industrial Average indicating a 105 point advance and those linked to the S&P 500 priced for a 20 point move to the upside.
Futures tied to the Nasdaq are indicating a 110 point opening bell gain as benchmark 10-year Treasury note yields ease to 1.746% in overnight trading and ahead of tomorrow’s auction of $36 billion in new notes.
2. — Fed Chair Powell Faces Senate Banking Committee
Federal Reserve Chairman Jerome Powell will tell lawmakers on the Senate Banking Committee later today that he and his colleagues will “prevent higher inflation from becoming entrenched”.
In prepared remarks for his confirmation hearing testimony on Capitol Hill, set to begin at 10:00 am Eastern time, Powell said the country’s post-pandemic recovery will be “different in some respects”, adding that the “pursuit of our goals will need to take these differences into account”.
He made no reference to interest rate hikes, which could begin as soon as March and could total as many as four before the end of the year, but conceded that high inflation “exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation.”
Lael Brainard, President Joe Biden’s nominee for Fed Vice Chair, will face the Committee on Thursday.
3. — Fed Vice Chair Clarida Steps Down Amid Trading Controversy
Federal Reserve Vice Chair Richard Clarida said late Monday that he will step down from his role later this week amid another series of reports linked to trading by central bank officials.
Clarida, who was due to leave the Fed at the end of the month to make way for President Joe Biden’s nominee Lael Brainard, is the third Fed official to resign in recent months following reports of trading for their individual accounts during the market upheaval triggered by the coronavirus pandemic.
The Vice Chair corrected his own financial disclosures last month, showing he purchased a stock fund in February of 2020 shortly before the Fed unveiled plans to support the economy with billions in monetary stimulus, a move that Fed ethics officials said was “in compliance with applicable laws and regulations governing conflicts of interest.”
4. — Tesla Notches Record December Sales in China, Gets Morgan Stanley Boost
Tesla (TSLA) – Get Tesla Inc Report shares moved higher again Tuesday, trading firmly over the $1,000 mark, following data from China showing record December sales in the world’s biggest car market.
The stock was also given a boost from a price target upgrade at Morgan Stanley, which pegged the shares at $1,300 each.
The China Passenger Car Association (CPCA) said Tesla sold 70,847 China-made cars last month, nearly three times that total recorded last year and more than a third ahead of November’s pace. Tesla said on January 2 that global deliveries for the three months ending in December rose 70% from last year to 308,600 units, its sixth consecutive quarterly record, taking the 2021 total to 936,172 units.
Tesla shares were marked 1.6% higher in pre-market trading to indicate an opening bell price of $1,074.75 each.
5. — Pfizer Sees Omicron-Focused Vaccine Ready For March
Pfizer (PFE) – Get Pfizer Inc. Report shares nudged higher in pre-market trading after the drugmaker said it’s developing a hybrid vaccine that protects against Covid’s original strain as well as the newly-emerged Omicron variant.
Pfizer said it may develop the hybrid, or produce an Omicron-specific vaccine in the coming months, with a decision likely set for March, with filings for approval from U.S. regulators shortly afterwards.
The move comes amid a worrying wave of new Covid infections, most thought to be a form of the Omicron variant, sweeping across the United States. Monday’s total infection tally hit a record 1.3 million and lifted the the seven-day average to around 700,000
Pfizer shares were marked 0.76% higher in pre-market trading Tuesday to indicate an opening bell price of $56.67 each.
