By Peter Nurse
Investing.com - European stock markets are expected to open higher Wednesday, continuing the global rally after Fed Chairman Jerome Powell indicated confidence in the U.S. economic recovery but didn’t point to an accelerated path towards policy normalization.
The main equity indices closed higher Tuesday, with the tech-heavy Nasdaq Composite leading the way, and this positive tone has been matched in Asia overnight.
At his confirmation hearing for a second term in charge of the U.S. central bank, Powell stated that the economy could handle tighter monetary policy even in the face of the new Covid-19 surge. He, however, did not announce a quicker change in policy from what had already been signalled, to the market's relief.
A new test of sentiment is expected later Wednesday with the release of the U.S. CPI data for December, which is expected to come in hot, climbing to 7% year-on-year.
Back in Europe, Germany reported a new daily record for Covid-19 cases on Tuesday, illustrating that the Omicron variant continues to run wild through the continent.
More than half of people in Europe could contract the new variant in the next two months if infections continue at current rates, the World Health Organisation said.
In corporate news, Dutch health technology company Philips (AS: PHG ) said it expected fourth-quarter core profit to drop around 40%, hit by a global shortage of electronic components and the fallout from a massive recall of ventilators.
Just Eat Takeaway (AS: TKWY ), Europe's largest meals delivery company, reported fourth-quarter order growth of 14%, and maintained its financial forecasts for 2022.
Oil prices stabilized Wednesday after the sharp gains of the previous session pushed benchmark contracts to their highest levels since the highly transmissible Omicron variant emerged in late November. Powell’s testimony also gave the market a boost.
However, supply data from the American Petroleum Institute suggested caution may be warranted. While crude stocks fell by 1.1 million barrels last week, gasoline stockpiles rose by a hefty 10.9 million barrels suggesting the Omicron outbreak may be having an impact on U.S. drivers.
Investors now await the official crude oil supply data from the U.S. Energy Information Administration due later in the day.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.