Stocks Advance Ahead of Rate Decisions and Inflation Data This Week

Barry Adams
12 Dec, 2022
New York City

Stocks turned higher on Wall Street ahead of the release of the consumer inflation data on Tuesday and the Fed's rate decision on Wednesday. 

Investors were cautiously optimistic and are estimating consumer prices to ease in November to between 7.3% and 7.5%, following the increase of 7.7% in October. 

The Federal Reserve is also set to moderate its rate hike on Wednesday and investors are looking for more clues on the health of the economy after the two-day meeting. 

The European Central Bank is also expected to announce its rate decision on Thursday and investors are hoping that the next rate hike will be 50 basis points. 

The latest survey from the New York Federal Reserve showed inflation expectation for the year ahead declined to 5.2% in November from 5.9% in October. 

The survey also indicated 3-year ahead inflation expectation declined to 3% and 5-year expectation fell to 2.3%. 

 

Market Indexes Retain Positive Bias

Market indexes traded in a tight trading range ahead of rate decisions from the U.S. Federal Reserve, the Bank of England and the European Central Bank later in the week. 

Investors are also confronting global economic slowdown in the face of a rising rate environment. 

The S&P 500 index increased 0.5% to 3,955.76 and the Nasdaq Composite index added 0.3% to 11,042.48. 

 

Crude Oil Rebounded On China optimism 

Crude oil prices in New York and London rebounded after mobility restrictions were eased further in several cities in China. 

Crude oil market remained on the edge after the European Union placed a price cap of $60 a barrel transported using oil tankers registered in the region. 

Crude oil edged up $2.65 to $73.68 a barrel and natural gas futures increased 52 cents to $6.77 a thermal unit. 

The yield on 2-year Treasury notes inched up to 4.38%, 10-year Treasury notes edged up to 3.58% and 30-year U.S. bonds advanced to 3.56%. 

 

U.S. Stock Movers 

Horizon Therapeutics Plc increased 15.1% to $112.0 after the company agreed to be acquired by Amgen for $116.50 a share or $27.8 billion. 

 Coupa Software Inc increased 26.7% to $78.69 after the software developer agreed to a $81 a share or $8 billion offer from the private equity manager Thoma Bravo. 

Weber Inc jumped 23.3% to $8.03 after the maker of grills and cooking ranges agreed to be acquired by BDT Capital Partners for $8.05 a share of $2.32 billion. 

Rivian Automotive Inc declined 3.8% to $26.26 after the company halted its plan to make electric vans in partnership with Mercedes Benz in Europe and the company plans to save its capital resource ahead of market uncertainties. 

Microsoft Corp increased 1.8% to $248.19 after the company struck a 10-year "partnership deal" with the London Stock Exchange Group and took nearly a 4% stake in the U.K.-based exchange. 

The joint statement from the two companies said the LSE will spend about $2.8 billion over the 10-year period for cloud computing services and operate under Microsoft's Azure environment. 

The exchange operator acquired Refinitiv in a $27 billion deal with a private equity group led by Blackstone.