By Geoffrey Smith
Investing.com -- The European Central Bank is expected to announce fresh monetary stimulus, the FDA is set to approve Pfizer 's Covid-19 vaccine, jobless claims and CPI numbers are due, AirBnB starts trading after the second blowout IPO in as many days, and the Brexit can gets kicked another four days down the road. Here's what you need to know in financial markets on Thursday, December 10th.
1. ECB set to expand PEPP
The European Central Bank is expected to provide fresh monetary stimulus at its council meeting. The bank will announce its decisions at 7:45 AM ET (1245 GMT) and President Christine Lagarde will hold her regular press conference 45 minutes later.
Analysts expect the bank to increase the size of its flagship Pandemic Emergency Purchase Program by 500 billion euros ($600 billion), and to stretch the timeline of its operations by another six months through the end of next year. More ultra-cheap, long-term loans known as TLTROs are also on the cards, although the bank isn’t widely expected to cut its official deposit rate, currently at a record low -0.5%.
The actions, which were all-but pre-announced at the ECB’s last meeting, are a response to the slowdown in the Eurozone economy under the second wave of the Covid-19 pandemic.
2. Jobless Claims, CPI due
The U.S. will release its weekly numbers on jobless claims, at a time when Congress is still struggling to make any headway on a fiscal relief package – not least due disagreements over enhanced unemployment benefits.
Analysts expect initial claims to rise to 725,000 from 712,000 last week, in what would represent another week of large-scale job destruction due to the pandemic. Continuing claims are also expected to show signs of bottoming out, with only a modest decline to 5.335 million.
Also due at 8:30 AM ET are U.S. consumer inflation figures, which are expected to show that the official inflation rate stayed at 1.6% in November. Analysts will be looking particularly closely at developments in food prices, which have gained in importance in consumer spending this year.
3. Stocks set to open mixed on stimulus deadlock
U.S. stocks are set for another flat opening, still in suspended animation as talks continue on Capitol Hill over a stimulus package.
By 6:30 AM ET, Dow Jones futures were up 54 points, or 0.2%, while S&P 500 futures were up 0.1% and Nasdaq futures were down less than 0.1%.
All three indices finished with losses on Wednesday, with the Nasdaq losing nearly 2% as investors made room for two new hot market debutants in their portfolios.
Stocks likely to be in focus later include Facebook (NASDAQ:FB), which was hit by a new antitrust suit on Wednesday regarding its acquisitions of Instagram and WhatsApp, and Pfizer (NYSE:PFE), whose Covid-19 vaccine is set to be approved for emergency use by an FDA committee.
4. AirBnB to start trading after DoorDash blowout
However, most eyes are likely to be on the performance of AirBnB, which priced its IPO last night at $68 a share, more than 12% above the top end of a marketing range that had already been raised once.
That puts the total IPO proceeds at $3.7 billion and values the rental startup at $47 billion.
Earlier on Wednesday, DoorDash stock had closed up 86% on its market debut, after a similarly hectic marketing period.
The strong performance of both IPOs is, in a way, paradoxical. DoorDash is a bet on the pandemic having disrupted and accelerated the development of the restaurant/meal delivery business forever. AirBnB is by contrast a bet on the travel market rebounding strongly from an episode that will leave only temporary scars. There probably are ways for both to be simultaneously possible, but still…
5. Brexit can gets kicked another four days down the road
Boris Johnson and Ursula von der Leyen gave their negotiators another four days to bridge still-wide differences over key issues such as fishing rights, state aid and dispute resolution, after failing to make any visible headway in personal talks on Wednesday.
The pound fell further to $1.3306 by 6:30 AM ET and is now down 2% from last week’s highs, when markets were more willing to listen to spin about a deal being imminent.
Von der Leyen is set to brief leaders on the talks at a summit meeting that begins later Thursday. Despite the disappointment on Brexit, the EU looks likely to clinch a deal on its own 1.8 trillion euro budget for the next five years, along with an agreement on its proposed 750 billion Recovery Fund. Both have been held up by a dispute with Poland and Hungary over the rule of law.