US Session (12/13/2021)

Markets around the world braced for a wave of central bank decisions, with traders weighing the potential consequences of less generous monetary policies in the midst of coronavirus outbreaks and lofty equity valuations.

The S&P 500 fell from a high, while the tech-heavy Nasdaq 100 underperformed major stock benchmarks. A measure of mega-cap companies fell, with electric-vehicle maker Tesla falling about 5%.

Apple fell after the iPhone maker's market value approached $3 trillion. Airlines, cruise lines, and hotels all saw their stock prices plummet. Bonds and the dollar both rose. A bitcoin selloff has brought the world's largest cryptocurrency closer to a critical technical level.

About 20 central banks are scheduled to hold meetings this week, with the Federal Reserve expected to reduce bond purchases and signal an interest-rate hike in 2022, heralding a historic shift to combat the fastest inflation since the 1980s. The European Central Bank, the Bank of England, and the Bank of Japan are also expected to make monetary policy announcements.

The long-term price-to-earnings ratio of the S&P 500, which compares the current price to the 10-year average real earnings per share, has reached 37, a level not seen since 2000.

According to the latest NY Fed consumer survey, inflation expectations among US consumers have reached a new high of 6% for the coming year. According to the study, Americans anticipate faster price increases for items such as rent and food, which account for a large portion of household spending and cannot be easily substituted.

Repo ructions highlight failure of post-crisis policymaking | Financial Times

Asia Session (12/13/2021)

Most Asian equities fell as investors worried about the economic threats posed by the omicron variant, as well as central banks' efforts to contain rising inflation. Treasuries and the dollar both gained ground.

The Asia-pacific share index of MSCI declined for a third session, with Chinese technology stocks underperforming. Concerns over China's property industry have also resurfaced, and the real-estate crisis is likely to have contributed to the country's economic slowdown in November.

Equity contracts in the US and Europe rose somewhat. On Monday, the S&P 500 fell from a record high, while the technology-heavy Nasdaq 100 underperformed.

Treasury yields fell in US hours due to a risk-aversion sentiment, driven by the 30-year bond.

Traders are bracing expecting the Federal Reserve to unwind stimulus faster and signal an interest-rate hike in 2022, both of which might pose economic issues. The Fed's policy announcement on Wednesday is one of 20 central bank meetings this week that could cause market volatility.


Europe Session (12/13/2021)

On Monday, US futures gained alongside European stocks as traders braced for a flurry of central bank announcements this week amid fears about inflation and the economic threats posed by the Omicron.

US contracts rose after equities finished at an all-time high on Friday. Technology stocks rose in premarket trade, bringing Apple's market valuation close to $3 trillion if the trend continues. Miners led the rally in Europe's STOXX 600 index, as iron ore prices rose in hopes that China will enhance stimulus next year.

The Federal Reserve is anticipated to accelerate the withdrawal of stimulus on Wednesday, perhaps opening the door to earlier interest-rate hikes in 2022 if price pressures remain near a four-decade high. The 10-year Treasury yield in the United States remained unchanged at 1.48%, but the dollar rose.

Traders are reducing their wagers that the Bank of England will raise interest rates next year, as concerns about new COVID restrictions outweigh inflation fears. The pound fell after Prime Minister Boris Johnson warned of a "tidal wave" of omicron infections and set a year-end deadline for the country's booster immunization program.

Money market bets on 1% BoE rate are being pushed back to 2023 from 2022.

Belarus' Pres. Lukashenko again warns Minsk could halt gas transit to Europe in response to new western sanctions - TASS.

Russia's Deputy Foreign Minister Ryabkov: If the US and NATO do not provide security guarantees to Russia, this could lead to conflict - RIA.