Written by Brenda Nakalema

What the markets have instore this week; S&P500, Dow Jones, Nasqad Composite and Asian markets

The Federal Reserve’s rate-setting committee will be meeting for the last time in 2021 this week, which investors will closely …

The Federal Reserve’s rate-setting committee will be meeting for the last time in 2021 this week, which investors will closely watch. The Federal Open Market Committee’s two-day meeting takes place on Tuesday and Wednesday.

This week, earnings reports will be expected from a few companies; Campbell Soup, Lennar, Accenture, FedEx, Rivian, Adobe and Darden restaurants.

A quick look at markets on the other side of the globe reveals Chinese leaders’ efforts to avert what they term as an “economic hard landing.” Asian markets experienced a boost on Monday after Wallstreet hit a new high, with China making promises to release aid meant to shore up economic growth.

Ahead of the Federal Reserve policy meeting at which strategy around tackling U.S inflation might be discussed, Shanghai, Tokyo, Hong Kong and Sydney will closely watch the results of the meeting that could influence the decision on when to start rolling back stimulus that is boosting markets.

Wallstreet’s benchmark S&P 500 index SPX, +0.95%, ended Friday on a positive note; up 3.8% for the week in a rally led by tech companies.

Aside from that, Chinese leaders, at the annual planning meeting, promised tax cuts and other aid to entrepreneurs. The emphasis of this was to maintain stability after the negative effects experienced in the economy when growth fell to an unexpectedly low 4.9% over a year in the latest quarter.

Behind the ruling communist party’s current sentiments is the impending leadership changes. The Shanghai Composite Index SHCOMP, 0.43% rose by 0.8% to 3,695.30 and the Hang Seng in Hong Kong HIS, 0.37% rose 0.5% to 24,201.43.

The Nikkei 225 in Tokyo NIK 0.71% advanced 0.9% to 28, 696.68 brought on by stronger improvement in business conditions for services industries, as reported by the Tankan survey.

The Kospi in Seoul 180721, -0.20% gained 0.5% to 3,025.19, and Sydney’s S&P –ASX 200 XJO, +0.35% was 0.6% higher at 7,396.10.

It was an all-around gain, with New Zealand and Southeast Asian markets also gaining.

Last week’s trading session had Wall Street upturn, with the S&P 500 gaining 1% to 4,712.02, an upturn of 25% for the year. The Dow Jones Industrial Average DJIA rallied 0.6% to 35,970.99. The Nasdaq Composite COMP gained 0.7% to 15,630.60

Data released by the U.S government showed U.S consumer inflation rose to a 39-year high of 6.8% in November, in tandem with expectations and therefore did not rattle financial markets.

The rise in inflation has put pressure on the Fed to increase the pace at which bond purchases that increase money in the financial system are trimmed. Previously, the Fed had planned to raise ultralow interest rates in late 2022, but in light of recent events, investors expect that to be moved up to midyear.

This period is still proving to be very positive for stocks- on Friday, more than 70% of stocks in the S&P 500 rose. The biggest gain was registered by software maker Oracle, ORCL, which gained 15.6% after reporting strong quarterly results. Other winners included Microsoft MSFT, which rose 2.83% and Apple AAPL, which rallied 2.6%.

Non-tech sectors such as manufacturers and retailers of household goods also contributed to the rise in the S&p 500; Costco COST rose 6.58%, and Coca-cola KO rose 2.6%.

The energy sector was no different and also experienced some impressive highs; benchmark U.S crude CL00 rose $1.15 to $72.82 per barrel on the New York Mercantile Exchange, a 1.63% rally. Brent crude BRN00, the benchmark for international oil trading, gained $1.16 to $76.31 per barrel in London.

The dollar USDJPY gained 113.55 yen from 113.43 yen on Friday. The euro EURUSD declined $1, 1297 from $1,1311.

Earnings reports this week include

Monday 13th December

J.Jill and PHX Minerals host earnings call

Tuesday 14th December

Investor days held by; Campbell Soup, Barnes Group, and Avaya Holdings.

Producer price index for November, released by The Bureau of Labor Statistics. Consensus estimate is for a 0.55% month-over-month rise, and for core PPI, which excludes food and energy, to gain 0.4%.

The National Federation of independent businesses reports its index, a survey of roughly 5000 small business owners across the country.

Wednesday 15th December

The Federal Open Market Committee concludes its two-day meeting in which policymakers will discuss fast-tracking the timetable for tapering monthly securities purchases.

Thursday 16th December

Companies hosting earnings calls include; Heico, Lennar, Accenture, FedEx, Jabil, Adobe, Rivian Automotive and Nordson.

The Bank of England announces its interest- rate and publishes minutes of the meeting.

Industrial production data for November released by The Federal Reserve. Economists are anticipating a rise of 0.6%. Capacity Utilization is expected at 76.8%.

Friday 17th December Conference calls hosted by Steelcase, Darden restaurants and Quanex Building Products