A double dose of potentially market-moving US events next week could set the tone for asset prices in the rest of 2022 and beyond, as investors brace for a key inflation report followed by the last Federal Reserve meeting of the year.
The S&P 500’s latest rebound stalled in the past week, as stronger-than-expected economic data fuelled concerns that the Fed will need to keep interest rates higher for longer in its bid to crush inflation, potentially bringing on a recession. The index has bounced about 10 per cent from its October lows but remains down more than 17 per cent on the year.
Equities’ trajectory in the near future may depend on whether Tuesday’s consumer price index report shows inflation is responding to the most aggressive Fed hiking cycle since the 1980s. Hotter-than-expected data could bolster fears of more Fed hawkishness, pressuring stocks.
“If the CPI comes in north of expectations or even doesn’t decline at all, that is not going to be market-positive," said Tom Hainlin, national investment strategist at US Bank Wealth Management.
CPI reports have been catalysts for outsized swings in markets this year, with the S&P 500 moving an average of around 3 per cent in either direction over the past six CPI releases, compared with an average daily move of about 1.2 per cent over the same period.
That includes a September 13 inflation release that sparked a 4.3 per cent sell-off and a November 10 report showing softer-than-expected inflation that fuelled a 5.5 per cent rise and helped stocks extend their latest rally. A second helping of benign data could bolster the case for a peak in inflation and buoy equities further.
“Typically around the CPI reports it has been pretty volatile this year, and I don’t see a reason to think it still won’t be that way when we get the data next week,” said David Lefkowitz, head of US equities at UBS Global Wealth Management.
Meanwhile, investors are factoring in a half-percentage-point rate hike from the Fed next week, a step down from its recent series of three-quarter-point increases. With Wednesday's rate action largely seen as a foregone conclusion, Wall Street will be focused on the central bank’s projections for how high rates will ultimately rise.
Also key will be Fed chairman Jerome Powell’s views on inflation and the possibility that the economy can slip into recession next year — an idea that has filtered into asset prices and dominated investor thinking lately.
One closely-watched indicator can be seen in the US government bond market, where the Treasury yield curve recently inverted to its steepest level in at least 20 years, magnifying a signal that has preceded past economic downturns.
Mr Hainlin said he is concerned that pressure from higher rates on consumer and business spending has yet to be factored into investors' earnings expectations. The firm is slightly overweight fixed income and favours shares in sectors viewed as havens during rough economic times, such as utilities and healthcare.
If the CPI comes in north of expectations or even doesn’t decline at all, that is not going to be market-positive
Tom Hainlin,
national investment strategist at US Bank Wealth Management
Some believe a hefty amount of cash on the sidelines and seasonal factors could help invigorate the stock rebound if inflation is weaker than expected or investors like what the Fed has to say.
Investors that have whittled down equity positions and beefed up cash reserves have shown a tendency to jump aboard stock rallies in recent months, helping amplify upside moves in equities.
A Deutsche Bank report published on December 4 showed that equity positioning remained lower than it had been for about 86 per cent of the time since January 2010, although it has crept higher in recent weeks. Cash levels among fund managers surveyed by Bank of America Global Research stood near multi-decade highs last month.
At the same time, the S&P 500, which is down 3.6 per cent so far this month, has risen an average of 1.5 per cent in December since 1950, the third-best performance of any month, according to the Stock Trader's Almanac.
“People, ourselves included, would expect the seasonals to take us into year-end, absent a huge surprise on the CPI and the Fed,” said Walter Todd, chief investment officer at Greenwood Capital.
Others, however, think the recent rally in stocks is already all but over. Morgan Stanley strategists earlier this week warned clients of risks to corporate earnings and urged investors to stay “defensively oriented” in areas such as healthcare and utility stocks.
“We recommend taking profits before the Bear returns in earnest,” they wrote.
The%C2%A0specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Dual%20synchronous%20electric%20motors%20%20%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E646hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E830Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ETwo-speed%20auto%20(rear%20axle)%3B%20single-speed%20auto%20(front)%20%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh552%2C311%3B%20Dh660%2C408%20(as%20tested)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3Enow%3C%2Fp%3E%0A
Company%20Profile
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Results
2pm: Al Sahel Contracting Company – Maiden (PA) Dh50,000 (Dirt) 1,200m; Winner: AF Mutakafel, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
2.30pm: Dubai Real Estate Centre – Maiden (TB) Dh60,000 (D) 1,200m; Winner: El Baareq, Antonio Fresu, Rashed Bouresly
3pm: Shadwell – Rated Conditions (TB) Dh100,000 (D) 1,950m; Winner: Lost Eden, Andrea Atzeni, Doug Watson
3.30pm: Keeneland – Handicap (TB) Dh84,000 (D) 1,000m; Winner: Alkaraama, Dane O’Neill, Musabah Al Muhairi
4pm: Keeneland – Handicap (TB) Dh76,000 (D) 1,800m; Winner: Lady Snazz, Saif Al Balushi, Bhupat Seemar
4.30pm: Hive – Conditions (TB) Dh100,000 (D) 1,600m; Winner: Down On Da Bayou, Royston Ffrench, Salem bin Ghadayer
5pm: Dubai Real Estate Centre – (TB) Handicap Dh64,000 (D) 1,600m; Winner: Lahmoom, Royston Ffrench, Salem bin Ghadayer
The specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 849Nm
Range: 456km
Price: from Dh437,900
On sale: now
The%20specs
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TOP%2010%20MOST%20POLLUTED%20CITIES
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COMPANY%20PROFILE%20
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MATCH INFO
Uefa Champions League semi-final, first leg
Tottenham 0-1 Ajax, Tuesday
Second leg
Ajax v Tottenham, Wednesday, May 8, 11pm
Game is on BeIN Sports
Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
Price: Dh4,229
iPhone XS Max
It is expected to be a grander version of the iPhone X with a 6.5-inch screen; an inch bigger than the screen of the iPhone 8 Plus.
Price: Dh4,649
iPhone XR
A low-cost version of the iPhone X with a 6.1-inch screen, it is expected to attract mass attention. According to industry experts, it is likely to have aluminium edges instead of stainless steel.
Price: Dh3,179
Apple Watch Series 4
More comprehensive health device with edge-to-edge displays that are more than 30 per cent bigger than displays on current models.
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Moral education needed in a 'rapidly changing world'
Moral education lessons for young people is needed in a rapidly changing world, the head of the programme said.
Alanood Al Kaabi, head of programmes at the Education Affairs Office of the Crown Price Court - Abu Dhabi, said: "The Crown Price Court is fully behind this initiative and have already seen the curriculum succeed in empowering young people and providing them with the necessary tools to succeed in building the future of the nation at all levels.
"Moral education touches on every aspect and subject that children engage in.
"It is not just limited to science or maths but it is involved in all subjects and it is helping children to adapt to integral moral practises.
"The moral education programme has been designed to develop children holistically in a world being rapidly transformed by technology and globalisation."
More on Turkey's Syria offence
Community Shield info
Where, when and at what time Wembley Stadium in London on Sunday at 5pm (UAE time)
Arsenal line up (3-4-2-1) Petr Cech; Rob Holding, Per Mertesacker, Nacho Monreal; Hector Bellerin, Mohamed Elneny, Granit Xhaka, Alex Oxlade-Chamberlain; Alex Iwobi, Danny Welbeck; Alexandre Lacazette
Arsenal manager Arsene Wenger
Chelsea line up (3-4-2-1) Thibaut Courtois; Cesar Azpilicueta, David Luiz, Gary Cahill; Victor Moses, Cesc Fabregas, N'Golo Kante, Marcos Alonso; Willian, Pedro; Michy Batshuayi
Chelsea manager Antonio Conte
Referee Bobby Madley
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
RESULTS
6.30pm: Emirates Holidays Maiden (TB) Dh 82,500 (Dirt) 1,900m
Winner: Lady Snazz, Richard Mullen (jockey), Satish Seemar (trainer).
7.05pm: Arabian Adventures Maiden (TB) Dh 82,500 (D) 1,200m
Winner: Zhou Storm, Connor Beasley, Ali Rashid Al Raihe.
7.40pm: Emirates Skywards Handicap (TB) Dh 82,500 (D) 1,200m
Winner: Rich And Famous, Royston Ffrench, Salem bin Ghadayer.
8.15pm: Emirates Airline Conditions (TB) Dh 120,000 (D) 1,400m
Winner: Rio Angie, Sam Hitchcock, Doug Watson.
8.50pm: Emirates Sky Cargo (TB) Dh 92,500 (D) 1,400m
Winner: Kinver Edge, Richard Mullen, Satish Seemar.
9.15pm: Emirates.com (TB) Dh 95,000 (D) 2,000m
Winner: Firnas, Xavier Ziani, Salem bin Ghadayer.
Aayan%E2%80%99s%20records
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Scores
Day 2
New Zealand 153 & 56-1
Pakistan 227
New Zealand trail by 18 runs with nine wickets remaining
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
UNSC Elections 2022-23
Seats open:
- Two for Africa Group
- One for Asia-Pacific Group (traditionally Arab state or Tunisia)
- One for Latin America and Caribbean Group
- One for Eastern Europe Group
Countries so far running:
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20Z%20FOLD%204
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In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
The squad traveling to Brazil:
Faisal Al Ketbi, Ibrahim Al Hosani, Khalfan Humaid Balhol, Khalifa Saeed Al Suwaidi, Mubarak Basharhil, Obaid Salem Al Nuaimi, Saeed Juma Al Mazrouei, Saoud Abdulla Al Hammadi, Taleb Al Kirbi, Yahia Mansour Al Hammadi, Zayed Al Kaabi, Zayed Saif Al Mansoori, Saaid Haj Hamdou, Hamad Saeed Al Nuaimi. Coaches Roberto Lima and Alex Paz.
Company%20profile
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Ukraine
Capital: Kiev
Population: 44.13 million
Armed conflict in Donbass
Russia-backed fighters control territory
MATCH INFO
Uefa Champions League semi-finals, second leg:
Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE
Game is on BeIN Sports
