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Pressure on Trump, Fed Speakers, Merkel's Lockdown Warning - What's up in Markets

EconomyJan 12, 2021 11:53
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© Reuters.

By Geoffrey Smith 

Investing.com -- The House will vote on asking Vice President Mike Pence to remove Donald Trump from the president’s office. A vote on impeachment is pencilled in for Wednesday in the (likely) event of Pence refusing. Angela Merkel warns Germany may need another 10 weeks of lockdown, while a raft of Fed speakers will flesh out thoughts of when the best moment to start tapering bond purchases may be. The American Petroleum Institute also releases weekly oil inventory data. Here’s what you need to know in financial markets on Tuesday, January 12th.

1. Democrats prepare to impeach Trump

The FBI warned of armed protests and potential violence across the U.S. over the next week, which will culminate in the inauguration of Joe Biden as president.

House Democrats are set to bring impeachment proceedings against outgoing President Donald Trump after Vice President delayed answering a call for him to remove Trump from office by invoking the 25th Amendment of the Constitution.  A motion formally calling on Pence to take action is due to be voted on today, with a vote on impeachment likely on Wednesday.

Elsewhere, right-wing social media site Parler said it will sue Amazon (NASDAQ:AMZN) for refusing to host its service with its Cloud unit AWS. Facebook (NASDAQ:FB) also announced on Monday that it will take down all content featuring the “Stop the Steal” slogan popularized by Trump after the November election.

2. Fed officials hint at year-end tapering of bond purchases

A suit of officials at the Federal Reserve hinted that they would be open to the idea of tapering the Fed’s bond purchases toward the end of the year. Richmond Fed President Tom Barkin, Atlanta’s Raphael Bostic and Dallas’ Robert Kaplan all indicated a degree of openness to winding down stimulus from the fourth quarter in various public appearances.

The yield on the 10-Year Treasury bond rose further in response overnight, to a new high for the year of 1.16%. That kept the dollar supported against the euro and other currencies.

There will be another barrage of Fedspeak on Tuesday, starting with Bostic again at 8:30 AM ET, followed by governor Lael Brainard at 8:35 AM. Bostic and Kaplan both speak at 11 AM ET, while the Cleveland Fed’s Loretta Mester and her Kansas City counterpart  Esther George speak at 12 PM and 1 PM respectively.

3. Stocks set to bounce; Steris/Cantel merger eyed

U.S. stock markets are set to open modestly higher, recouping some of Monday’s losses.

By 6:30 AM ET, Dow Jones futures were up 76 points or 0.3%, while S&P 500 futures were also up  0.3% and Nasdaq futures, which had the heaviest losses on Monday, were up by 0.4%.

Stocks likely to be in focus include, again, the social media companies that are now squarely in the middle of a new culture war over free speech and hate speech. Also of note will be medical device makers Cantel Medical (NYSE:CMD) and STERIS (NYSE:STE), whom The Wall Street Journal reported as being in merger talks.

4. Germany considers 10-week extension to lockdown; China outbreak reportedly eases

German Chancellor Angela Merkel is considering a 10-week extension to the country’s lockdown that would effectively ensure that Europe’s largest economy remains suppressed by anti-Covid-19 measures for the whole of the first quarter.

Germany’s infection rates had been improving in recent days, but still not quickly enough to satisfy a government that has done better than most in the west to contain the pandemic. Germany, with around one-quarter of the U.S.’s population, has registered only 41,000 deaths, compared to the U.S.’s 376,000.

Elsewhere, China reported a drop in new infections in the region of Hebei, easing concerns about the spread of the new Covid-19 variant there.  Japan’s Prime Minister Suga, meanwhile, indicated he may extend the current state of emergency in Tokyo to other prefecture including Osaka and Kyoto.

5 Oil rises ahead of API inventories

Crude oil prices rose to fresh 11-month highs, bolstered by a combination of factors ranging from faster rollouts of vaccines in the U.S. to expectations of a rebound in air travel in India and receding fears of lockdowns in China (which has been a rare bright spot for demand in recent months).

By 6:30 AM ET, U.S. Crude prices were up 1.4% at $53.01 a barrel, while Brent futures were up 1.5% at $56.51.

At 4:30 PM ET, the American Petroleum Institute will report its weekly assessment of U.S. crude inventories. Last week’s figures were marked by the rare absence of imports from Saudi Arabia.

Pressure on Trump, Fed Speakers, Merkel's Lockdown Warning - What's up in Markets
 

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Comments (1)
Dirk Reynen
Dirk Reynen Jan 12, 2021 18:56
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Just so we all singing off the same sheet here... its now illigal to be right wing but perfectly fine to be a looney left winger. For the record this is not confirmed anywhere in writing but its still the narrative we are being force fed. Take care everyone and Goodnite.
Dirk Reynen
Dirk Reynen Jan 12, 2021 18:56
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...narrative we are being force fed. Thank you and goodnight everybody.
Dirk Reynen
Dirk Reynen Jan 12, 2021 18:56
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Just in: apparently F8, 7wi773r, 1n$7a,Y7, Wa and g00g have all t3$t3d + forCommunism1-9
 
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