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Pandemic and Monetary Policy Weigh on Stocks
• US stocks fell Friday over concerns related to increasing coronavirus cases and tighter monetary policy both at home and abroad. The UK reported 93,045 new COVID-19 cases Friday, breaking the daily record for the third consecutive day. Stateside, COVID-related hospitalizations are up 22% in New York, 71% in Connecticut, and 66% in New Jersey in the past two weeks.
• In addition to health concerns, investors are monitoring what effects this wave of cases could have on restrictions around the world. Any updated rules and regulations related to travel could weigh on the global economy, including everything from demand for oil to travel and hotel bookings.
• Meanwhile, fund strategists across the street appeared to be rotating out of high-tech growth names to consumer staples in light of the Federal Reserve's decision last week to expedite its tapering timeline. The more hawkish stance from both the Federal Reserve and the Bank of England mean Wall Street is expecting interest rates to rise. While this may help tame inflation, it means investors are dialing down their exposure to growth stocks.
What to Be on the Lookout for Today
• The Leading Economic Indicators for November are released.
• Carnival (CCL) reports quarterly results. The cruise line operator credits strict COVID-19 safety rules for the limited number of outbreaks since it began sailing out of the US again. Even though the majority of passengers and employees are vaccinated, it’s not clear yet what impact Omicron is having. That’s something investors will be paying close attention to when Carnival reports its latest results.
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A Few Headlines That Should Be on Your Radar
This is the final week of major economic data releases before the end of the year. Major reports include real consumer spending and core inflation along with two consumer sentiment numbers. As prices continue to rise along with coronavirus infections, investors are trying to understand how these economic and health developments are weighing on Main Street and Wall Street. Lackluster figures could sour sentiment on the Street, weighing on major averages heading into the end of the year. Read more >> Nauticus Robotics, which aims to replace human-operated ships with robots and software, is going public via a SPAC transaction. The green startup is joining a growing list of companies trying to capitalize on investors' interest in companies that lower emissions and disrupt markets. The announcement also highlights the relevance of SPACs as a way to access public capital. So far this year, SPACs have raised over $160 billion — a record for the industry. Read more >> The new Spider-Man movie which debuted in theaters this past weekend is proving to be a boon to Sony and its steaming platform agnostic strategy. Sony's ability to ink deals with any platform it wants, including Netflix, Disney, and others has allowed it to finalize major content deals that reach broad audiences. It also means Sony doesn't have to worry about streaming cannibalizing box office sales, or vice versa. Read more >> 33 ways to celebrate the holidays affordably Looking to enjoy the holidays without busting your budget? Here are some ideas to get you started. Read more >>Not-So-Breaking News
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Oracle (ORCL) is gearing up to buy Cerner (CERN), the medical records software maker, for $30 billion. If a deal is inked it would be the largest transaction of 2021 and the biggest in Oracle’s history.
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Meta (FB) warned roughly 50,000 Facebook users were the target of spying by private surveillance companies. Meta said the people impacted were alerted to the breach. Meta banned seven surveillance-for-hire companies from its platform as a result.
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The Consumer Financial Protection Bureau is seeking information from Affirm (AFRM), Afterpay (AFTPY), PayPal (PYPL), Klarna, and other buy-now-pay-later companies about how their products work. The CFPB is concerned about the ease in which consumers can rack up debt.
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JPMorgan Chase (JPM) agreed to pay fines totalling $200 million for letting employees in its Wall Street division use WhatsApp and other messaging apps to get around record keeping rules. JPMorgan had allowed those types of communications from at least 2015.
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TPG, a private equity firm, is gearing up to go public via an IPO. TPG didn’t say how much money it is aiming to raise and at what price. In June the PE firm’s valuation in an IPO was pegged at around $10 billion.
Financial Planner Tip of the Day
“It’s recommended that a credit report be checked yearly from the three major credit bureaus. Reviewing them on a yearly basis is a good way to understand and monitor overall credit health.”
Brian Walsh, CFP® at SoFi