By Geoffrey Smith
GossipMantri.com – Congress is hearing testimony from Fed Chairman Powell and Treasury Chief Executive Officer Mnuchin for the first time since their dispute over the Fed’s crisis credit facilities. Zoom is failing to meet sky-high expectations, but stocks should still open to new highs. Bitcoin hits an all-time high as the dollar languishes and OPEC fails to agree on how much oil to pump next year. Here’s what you need to know about the financial markets on Tuesday, December 1st.
1. Powell, Mnuchin to Congress to explain their dispute
Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin will brief Congress starting at 10 a.m. ET (3 p.m. GMT). This is their first joint testimony since Mnuchin refused to extend the authority of four loan programs that the Fed says are still needed to support the economy during the pandemic.
Neither Powell nor Mnuchin made reference to their public dispute over the matter in prepared remarks, but they will certainly be asked about it later.
Concerns about the economy rekindled on Monday after California Governor Gavin Newsom said he may have to issue a new stay-at-home order to stem a growing crisis in state hospitals.
Away from Congress, Fed board member Lael Brainard – suggested by some to succeed Powell as Fed chairman – will also speak at noon ET. On the data timeline, meanwhile, there’s Redbook research data due at 8:55 a.m. ET and the ISM manufacturing survey at 10 a.m.
2. Bitcoin hits record high as dollar languishes
Whether Congress asks Powell and Mnuchin about it or not, the markets continue to deliver their verdict on their handling of the currency. () hit an all-time high, with last week’s shock sell-off seen as a buy-down.
The digital currency came to a halt just ahead of the $ 20,000 mark at $ 19,951, but remains supported by a growing number of speculators willing to dip a toe in the water. By 6:15 a.m. ET, it was back to $ 19,926.00, up 7.6% on the day.
The, which tracks the greenback against a basket of developed market currencies, continues to languish near a 30-month low at 91.782, pulling back slightly against its riskier and safe-haven peers.
3. Stocks should open to new records
U.S. stock markets are expected to open sharply higher, testing new records, with growing optimism that vaccines to treat Covid-19 will be available sooner rather than later. Pfizer (NYSE 🙂 and BioNTech said earlier Tuesday that they had sought approval of their drug from European regulators.
At 6:15 am, were up 347 points, or 1.2% while the contract was up 1.1% and the contract was up 0.9%.
Stocks likely to be the focus later include Zoom Video stock (NASDAQ :), which fell 7.6% after-hours trading after reporting profits and a prospect that while inherently strong, could not match the optimism built into its current price.
Emphasis is also placed Exxon Mobil (NYSE :), which fell 3.5% on Monday after announcing a massive $ 20 billion depreciation on its gas assets and a sharp cut in capital spending. Exxon is up 2.4% in pre-release.
4.Europe shows the tension of the lockdown
Europe’s manufacturing sector held up slightly better than expected in November amid a second wave of lockdowns to contain the coronavirus.
The Eurozone actually fell to 53.8 from 53.6, defying expectations of a decline, although both national indices and both fell.
Unlike the spring, all of the major European economies kept their factories open this time around, letting the pressure of lockdowns fall only on services. The PMIs for these – and the Eurozone Composite PMI – will be announced on Wednesday.
Lockout tension was still visible in another sub-zero month, which ran -0.3% on the year in November. This puts additional pressure on the European Central Bank to act when it meets next week.
5. OPEC fails to agree on exit
OPEC failed to agree on a production policy for the next few months after the UAE – with apparent support from non-member Russia – argued the bloc should increase production by 500,000 barrels per day as of January 1.
The consensus hope, encouraged in advance by Saudi Arabia, the most powerful member of the Union, was that production would be frozen at current levels for another three months.
OPEC has given itself two more days to resolve the issue before making a final decision with Russia and others on Thursday.
US prices were largely flat at $ 45.36 per barrel, while they were up 0.3% to $ 48.03 per barrel. US inventory data is due 4:30 p.m. ET, as usual