Stocks seen weaker amid investors’ risk-off mood

06 Dec , 2021 By : Kanchan Joshi

Stocks look set to start the week under pressure with investors looking to U.S. inflation data amid the Federal Reserve’s hawkish tilt and the impact of omicron as risk aversion grips financial markets.

Asian futures pointed to benchmarks opening lower. U.S. stocks extended a weekly slide Friday after a mixed U.S. jobs report fanned volatility. Technology companies underperformed led by Tesla Inc., Facebook parent Meta Platforms Inc. and Apple Inc. Haven assets like Treasuries and gold climbed.

The dollar was mixed in early Asian trading, while the yen held most of its gains. Cryptocurrencies got swept up in the risk-off wave, with Bitcoin plunging.

Chinese markets will be in focus after the nation’s companies listed in the U.S. tumbled Friday amid growing scrutiny of Chinese firms traded in America.

U.S. consumer prices in November are expected to show the largest annual advance in decades, keeping pressure on the Fed to deliver swifter policy tightening. Fed Chair Jerome Powell has signaled faster tapering of asset purchases amid elevated inflation. That assessment is unlikely to change after U.S. jobs had the smallest gain this year.

“This week’s November CPI data could trigger markets to price in a more aggressive tightening cycle," Kim Mundy, a strategist at Commonwealth Bank of Australia, said in a note. “Omicron related uncertainty will linger while market participants wait to learn about the severity, infectiousness and resistance of the strain."

Goldman Sachs Group Inc. cut its forecast for the U.S. economy this year and next with omicron seen as a drag on growth.

Meanwhile, Anthony Fauci, U.S. President Joe Biden’s chief medical adviser, said on Sunday, there didn’t seem to be “a great degree of severity to omicron," while cautioning it’s too early to be certain. Moderna Inc. President Stephen Hoge said there’s a “real risk" that existing vaccines will be less effective against omicron.

Some of the main moves in markets:

Stocks

The S&P 500 fell 0.8%

The Nasdaq 100 fell 1.7%

Nikkei 225 futures fell 1.2 percen earlier

Australia’s S&P/ASX 200 Index futures rose 0.2 percent earlier

Hang Seng Index futures fell 1.7 percent earlier

Currencies

The Japanese yen was at 112.84 per dollar

The offshore yuan was at 6.3748 per dollar

The Bloomberg Dollar Spot Index was little changed Friday

The euro was at $1.1318