While Cleveland Federal Reserve President Loretta Mester, a voting member of the rate-setting panel, supported a smaller rate hike in December, San Francisco Fed President Mary Daly stressed on Monday the need to be careful to avoid a “painful downturn”.
Traders widely expect the Fed to raise rates by 50 basis points in December, with some even betting on a 28.9% chance of a 75-bps hike, according to CME Group’s (NASDAQ:CME) FedWatch Tool.
Although several policymakers have signaled a shift to smaller increases to allow the economy to absorb any monetary policy shocks, they have also underscored the need for a longer period of tightening to combat sticky inflation.
Investors will keep a close watch on further remarks by St. Louis President James Bullard and Kansas City President Esther George later in the day, and minutes from the Fed’s November meeting for more clarity on the monetary policy tightening path.
Among stocks, Walgreens Boots Alliance (NASDAQ:WBA) Inc rose 1.5% premarket after Cowen & Co upgraded the drug distributor stock citing its healthcare services business push.
At 6:57 a.m. ET, Dow e-minis were up 32 points, or 0.09%, S&P 500 e-minis were up 3 points, or 0.08%, and Nasdaq 100 e-minis were down 4.5 points, or 0.04%.
Tesla (NASDAQ:TSLA) Inc shares attempted to recoup some declines, rising 1.5%, after falling 6.84% in the previous session when the electric-vehicle maker said it will recall vehicles in the United States.
Best Buy Co Inc (NYSE:BBY) jumped over 7% after forecasting a smaller-than-expected drop in annual sales ahead of the holiday season, as steep discounts help soften the blow to electronics demand from rising prices.
Meanwhile, China strengthened its fight against COVID-19 with Beijing shutting parks, malls and museums while other cities resumed mass testing, amid concerns about the economy and fading hopes of a quick reopening.
U.S.-listed shares of Chinese companies like Pinduoduo (NASDAQ:PDD) Inc, Bilibili (NASDAQ:BILI) Inc and JD (NASDAQ:JD).com Inc slipped between 2.3% and 3%.
Durable sales for October, initial jobless claims and S&P Global (NYSE:SPGI) manufacturing and services data on Wednesday will be on investors watch-list for the holiday-shortened week.
Analysts expect thin trading volumes as markets will be shut on Thursday for Thanksgiving holiday and will remain open for half day on Friday.
Source: Economy - investing.com
