Here are the most important news, trends and analysis that investors need to start their trading day:
- Dow set to bounce on first day of December after big drop on omicron fears
- Bond yields rise after monthly ADP data on private sector hiring
- Oil prices rebound after rough November; coffee at 10-year highs
- Merck Covid pill advances; BioNTech CEO sees protection for vaccinated
- White House considers stricter international travel testing requirements
1. Dow set to bounce on first day of December after big drop on omicron fears
Dow futures rose roughly 300 points, or nearly 1%, to start the new month, in a continuation of recent Covid-driven seesaw trading on Wall Street. Omicron fears and concerns about the Federal Reserve accelerating its reduction of monetary stimulus slammed stocks Tuesday.
- The Dow finished a weak November, reversing Monday's rebound, with a 652-point or nearly 1.9% decline.
- The 30-stock average sank 2.5% in Friday's post-holiday shortened session as the new Covid variant became known. The Dow dropped 3.7% in November.
- The S&P 500 and the Nasdaq on Tuesday fell 1.9% and 1.5%, respectively. The S&P 500 declined 0.8% last month. The Nasdaq rose 0.25% in November.
Fed Chairman Jerome Powell goes before a House panel Wednesday, one day after telling senators that central bankers are expected to discuss speeding up their tapering of bond purchases as they battle rising inflation.
2. Bond yields rise after monthly ADP data on private sector hiring
Bond yields moved higher Wednesday, with the 10-year Treasury yield back near 1.48% after falling Tuesday on fears the pandemic would stifle economic growth. ADP's private payroll data showed U.S. companies added a better-than-expected 534,000 jobs in November, lower than October's slightly downwardly revised 570,000. During Covid, ADP has not been the best indicator of the monthly jobs report from the government, which is out Friday. However, both ADP's and the government's jobs tallies in October came in strong and beat expectations.
3. Oil prices rebound after rough November; coffee at 10-year highs
U.S. oil prices rebounded more than 4.5% on Wednesday, one day after falling over 5% on worries the omicron variant would curb demand. The American benchmark, West Texas Intermediate crude, dropped nearly 21% in November. OPEC and its international allies meet Thursday. Some analysts expect OPEC+ to pause plans to add 400,000 barrels per day of supply in January.
Alongside bad weather, global supply constraints have had a substantial impact on coffee, pushing prices to 10-year highs. Analysts expect tightness in the market to continue all the way into 2023. Uncertainty is also stemming from exporting countries such as Vietnam, which is seeing a rise in Covid cases that could hit production.
4. Merck Covid pill advances; BioNTech CEO sees protection for vaccinated
Merck shares rose less than 1% in Wednesday's premarket, the morning after a Food and Drug Administration advisory panel narrowly endorsed the use of the company's Covid pill. The drug needs final authorization from the FDA and the Centers for Disease Control and Prevention before it would be available to the public on an emergency basis. The FDA doesn't have to take its panel's advice but often does. Pfizer is seeking approval for a similar oral Covid treatment.
One day after Moderna's CEO created a stir in financial markets with a downbeat assessment of the current vaccines' efficacy against omicron, the CEO of BioNTech, which partnered with Pfizer on a Covid vaccine, told Dow Jones he believes vaccinated people will still have a high level of protection.
5. White House considers stricter international travel testing requirements
The Biden administration is mulling tightening requirements for international travel due to omicron, a White House official told NBC News. The official said the administration is continuing "to evaluate the appropriate measures to protect the American people from Covid-19" and the new variant, including "considering more stringent testing requirements for international travel." The discussion comes on the heels of the federal government restricting travel for non-U.S. citizens from South Africa and seven other countries in an effort to contain the new variant.