Beijing began dismantling its strict COVID curbs this month in
an abrupt policy U-turn and on Monday announced it would drop
its quarantine rule for inbound travelers from next month.
The move initially brought cheer to markets on hopes of a
recovery in China's COVID-hammered economy, but a jump in
infections has dampened sentiment.
"If the Chinese reopening story is positive for oil and
commodity prices, it's bad news for global inflation," said Ipek
Ozkardeskaya, senior analyst at Swissquote Bank.
"The surge in Chinese demand will certainly boost inflation
through higher energy and commodity prices and in response to
higher inflation, the central banks will continue hiking rates."
As markets enter the last leg of a grueling year for equities on
fears of a recession from the fastest pace of rate hikes by the
Federal Reserve since the early 1980s, focus has shifted to 2023
and the outlook for corporate earnings.
The benchmark S&P 500 and the Nasdaq are down 19.7% and 33.8%,
respectively, so far in 2022 and set for their biggest yearly
loss since the financial crisis of 2008.
The S&P 500 and Nasdaq ended lower on Tuesday at the beginning
of a holiday-shortened week as growth stocks bore the brunt of
investor angst over how long the Fed would continue to raise
interest rates to tame high prices.
Markets are now pricing in 65% odds of a 25-basis point rate
hike at the U.S. central bank's February meeting and see rates
peaking at 4.94% in the first half of next year..
At 6:14 a.m. ET, Dow e-minis were up 84 points, or 0.25%, S&P
500 e-minis were up 7.25 points, or 0.19%, and Nasdaq 100
e-minis were up 15.75 points, or 0.14%.
Shares of Tesla reversed declines to advance nearly 3%
premarket. They hit their lowest level in more than two years in
the previous session over demand worries in China.
Southwest Airlines Co slipped 0.7% as the carrier came under
fire from the U.S. government on Tuesday after it canceled
thousands of flights.
(Reporting by Amruta Khandekar and Bansari Mayur Kamdar in
Bengaluru; Editing by Sriraj Kalluvila)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](column_spacer.png)
|
|