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Before The Bell: 12/16/2021

The S&P/TSX and American Futures remain on the upside after they pared early losses and closed higher yesterday. The Dow Jones Industrial Average gained 383.25 points (+1.08%) to 35,927, the S&P 500 rose 75.76 points (+1.63%) to 4,709, and the Nasdaq 100 jumped 374.69 points (+2.35%) to 16,289. As expected, the Federal Reserve kept its target rate unchanged at 0.25%. At the same time, the central bank announced plans to accelerate winding down its asset purchases amid a continued rise in inflation, and signaled three rate hikes in 2022.


Later today, the latest number of initial jobless rate is expected to rise to 200,000. Industrial production is expected to increase 0.6% on month in November. Housing starts may rise to an annualized rate of 1.567 million units in November. The December Markit manufacturing purchasing managers index is expected at 58.5. In Canada, November ADP Employment change will be expected.


European equity indices are bullish. In an unexpected move, the Bank of England has raised its key interest rate to 0.250%, vs 0.100% previously. 8 out of 9 members of the Monetary Policy Committee have voted in favor of this hike. The European Central Bank has kept its key deposit facility rate unchanged at -0.500%. The December Markit manufacturing purchasing managers index was released at 58.0 vs 57.8 expected for the Eurozone, at 57.9 vs 56.9 expected for Germany, at 54.9 vs 55.4 expected for France, and at 57.6, as expected for the U.K. The December Markit services purchasing managers index was released at 53.3 vs 54.3 expected for the Eurozone, at 48.4 vs 51.0 expected for Germany, at 57.1 vs 56.0 expected for France, and at 53.2 vs 57.0 expected for the U.K.


Asian indices closed in dispersed order. The Japanese Nikkei and the Chinese CSI closed on the upside but the Hong Kong HSI and the Australian ASX lost ground. Japan's exports grew 20.5% on year in November (vs +21.0% expected), according to the government. The Jibun Bank Japan manufacturing purchasing managers index edged down to 54.2 in December, and the services index was down to 51.1. Australia's jobless rate declined to 4.6% (as expected).


Crude oil WTI price is on the upside. U.S. official data showed a reduction of 4.58 million barrels in the latest crude-oil stockpiles, much more than a reduction of 1.65 million barrels expected. In addition, gasoline inventories decreased by 0.7 million barrels last week, compared to the excepted increase of 1.606 million barrels.

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