🧸Inflation and recession dominate the sentiment💣

Equity markets gave up their pre-market gains as investors fear of a hard landing. Although it is a new week, investors remain worried about Fed’s monetary tightening policy and that a recession is looming. 

The Santa Claus Rally appears non-existent as stocks are back on weeks of decline. Even as Inflation showed signs of cooling, the Fed isn’t ready to back down on rate hikes, which signals that rates will remain elevated for some time. 

Moreover, Pika World expects higher volatility as trading becomes quieter with the holidays approaching. We will still receive critical economic data for the week and urge more caution in trading. 

In particular, we expect results from Nike and FedEx in the after-hour, which could send more pressure if the companies signal weakening demand and headwinds in guidance. 

🎢China is boosting oil prices🚘

We are seeking a firmer oil price in early Monday trading as investors look to perhaps more Chinese demand, given the government’s promise over the weekend to introduce more economic policies in 2023 to stabilize the fragile economy that Covid-19 restrictions have damaged. 

Even though there are several unverified news of the jump in covid cases in China and fatalities, the Chinese government’s firm tone on the need to increase domestic consumption as a critical priority helps to support oil prices with the expectation of higher demand. 

Moreover, as the US prepares to replenish its Strategic Petroleum Reserve in February, it can continue to push oil prices. These are indeed challenging news for the inflation narrative.

📮What’s on the menu today?📖

At 9.30 pm, we will receive the Building Permits data for Nov, which we expect to moderate to 1.485M from 1.512M in the prior period.