Watch For:

EuroCOIN indicator of euro area economic activity; EU Unemployment; EU PPI; ECB General Council meeting; Bank of England Decision Maker Panel data; OECD CPI.

Opening Call:

European stocks could open lower as investors brace for more volatility. Stock markets in Asia are mixed, U.S. stock future are pointing to a higher open for major indices. Dollar is steady. Oil edges higher, while gold prices softened.


European stocks are set to open lower Thursday after a turbulent day on Wall Street as traders tried to forecast the impact of the coronavirus's omicron variant.

All three major U.S. indexes finished lower in a stark turnaround from earlier in the day. Markets were sliding when the White House announced the discovery of the first omicron case in the United States. It is unclear whether omicron is more dangerous, but governments have responded by tightening travel controls, fueling unease about the outlook for a global economic recovery.

"Volatility in the short run should be expected. Ultimately, we're dealing with a little more uncertainty than we have been," said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance. "There's enough cause for concern that people are shooting first and asking questions later."

The latest data "painted an optimistic picture for economic conditions, but that seems to be taking a backseat as the Omicron variant can potentially shift the landscape," said Yeap Jun Rong of IG in a report.

On Wednesday, the Institute for Supply Management reported U.S. manufacturing growth activity accelerated faster than expected in November. Payroll processor ADP said employers hired more people than expected. That might raise expectations for Friday's U.S. government jobs data.

Stocks to watch: Investors are too conservative over Thyssenkrupp's valuation, Credit Suisse said.

At its fourth-quarter earnings, adjusted EBIT at EUR232 million was 17% above consensus, but the bigger surprise came from the industrial company's FY 2022 EBIT guidance of EUR1.5 billion-EUR1.8 billion, amid confidence in the recovery of the steel segment and reducing losses in its multi-tracks division as it divests itself of loss-making businesses, the bank said.

CS increases its own EBIT forecasts for 2022 and 2023 by 51% and 37%, respectively, to reflect stronger steel prices from annual negotiations with the auto sector, more than doubling its EPS expectations for those years.

The bank reiterates its outperform rating and raises its target price to EUR16.60 from EUR15.70.

Thyssenkrupp will host a capital markets day on Thursday.


The dollar strengthened against the euro and weakens against the yen. The chairman of Navellier & Associates notes that since late June, the WSJ Dollar Index has appreciated almost 6% against major currencies.

"The primary reason the US dollar is rallying is due to higher government bond yields than Japan and Europe, plus a strong economic outlook," Louis Navellier said.

"Eventually, a stronger U.S. dollar helps to lower the prices on most imported goods as well as commodities (since they are priced in U.S. dollars). So the Fed's argument that inflation is 'transitory' has some merit, since a strong US dollar will help to push down the prices of imported goods and some commodities." The strong dollar is also keeping Treasurys low, he said..

The euro could fall to $1.10 next year from $1.1337 currently given the prospect of the Fed raising interest rates sooner, Rabobank said.

While the dollar's gains could be limited by speculators potentially trimming bets on the currency rising in the coming month, it should still rise versus the euro next year given the scope for more "hawkish" action by the Fed, Rabobank forex strategist Jane Foley said.

Rabobank maintains its medium-term EUR/USD 1.12 target for now due to the risk of further dollar pullbacks, she said. "That said, the possibility of a break lower to 1.10 during the course of next year has increased."

USD/JPY may fall below the recent support of a 112.50-112.60 band, as the spread of the Omicron variant leads to drops in stocks and falls in U.S. Treasury yields, IG said.

Once that support is breached, the pair may test the next key level of 112.00, it said. USD/JPY has been trending lower amid concerns about the Omicron variant over the past few sessions and is at 112.91, compared with 112.78 as of Wednesday 5 p.m. Eastern Time. Investors are closely watching U.S. weekly jobless claims figures due later in the day to gauge the strength of the current U.S. labor market.


Barclays now believes the Fed will raise rates three times in 2022 and slow the pace of asset buying faster than is currently planned. But the firm also notes that even as the Fed raises rates, money markets remain flooded with cash, which could blunt the impact of the policy shift.

"With reserves balances over $4 trillion and nearly $1.5 trillion in the [reverse repo facility,] we expect it will be difficult for short-term interest rates to trade much above the interest rate floor," said the bank.


Oil prices were higher in early Asian trade as market concerns about the Omicron variant seem to have eased, ANZ said. In focus is a meeting between OPEC+ members that will determine whether the group will halt planned production increases, the bank said.

The current plan being discussed is whether OPEC+ should increase production to 400,000 barrels a day in January.


Gold prices were slightly lower in early Asian trade. The precious metal could trade sideways during the session, Oanda said: While the dollar has eased in recent days and the uncertainty surrounding the Omicron variant should give prices a boost, rising Treasury yields could put pressure on gold.

Copper prices were slightly lower in Asia's early trade, as the commodity extends a broad downturn in recent sessions due to rising concerns over Omicron.

Huatai Futures pointed out that orders for some copper products weakened substantially in November, signalling falling end demand that will weigh on prices.



Supply Imbalances Continued to Hold Back U.S. Growth This Fall, Fed's Beige Book Says

The U.S. economy grew at a "modest to moderate" pace this fall, with supply-chain issues and labor shortages holding back growth despite strong demand, the Federal Reserve said Wednesday.

The Fed report, a periodic collection of business anecdotes from around the country known as the Beige Book, found that consumer spending throughout the country was strong but held back by low inventories. Strong demand allowed firms to raise prices with "little pushback" from consumers, and increases were widespread throughout the economy.


First U.S. Omicron Case Is California Patient

The first known case of the Omicron variant in the U.S. was identified in a San Francisco resident who recently returned from South Africa, the Centers for Disease Control and Prevention and California health officials said.

The CDC said Wednesday that the fully vaccinated traveler, who returned to California on Nov. 22, has mild Covid-19 symptoms that are improving. The person has been self-quarantining since testing positive on Nov. 29, and all known contacts have so far tested negative for the variant, health officials said.


Biden Says Shelves Will Be Stocked for Holidays Despite Supply-Chain Backlogs

WASHINGTON-President Biden said that prices for everything from groceries to gas remain high but sought to assure Americans that his administration is tackling supply logjams.

"Those shelves are going to be stocked," Mr. Biden said in a speech Wednesday. He cautioned that some holiday gifts are always hard to come by, invoking hits from the past, including Cabbage Patch Kids.


Government Shutdown Deadline Approaches as Deal Eludes Lawmakers

WASHINGTON-Lawmakers worked Wednesday to reach an agreement on a short-term spending patch to avoid a potential partial government shutdown this weekend, with Democrats and Republicans still haggling over the details of the funding extension.

Party leaders had initially hoped to release an agreement earlier this week. Democrats have eyed a spending patch that would last until mid-or-late-January, while Republicans have pushed for a longer extension.


Yellen Defends Spending Plans Amid Growing Angst Over Higher Inflation

Treasury Secretary Janet Yellen on Wednesday defended Democrats' efforts to pass a roughly $2 trillion social-spending package, amid Republicans' criticisms that fiscal policy implemented earlier this year overstimulated the economy and fueled higher inflation.

"We had a very sizable fiscal stimulus," Ms. Yellen told the House Financial Services Committee. "We addressed what was a very substantial risk" of a prolonged economic downturn, she said.


Supply-Chain Snarls Hit Production of Trailers Needed to Haul Goods

Shortages of parts and labor are crimping production at truck-trailer factories, undercutting trucking companies' efforts to expand their capacity in a tight freight transport market.


Russia Expels Some U.S. Diplomats in Latest Tit-for-Tat Action

Russia ordered U.S. Embassy staff who have been in Moscow for more than three years to leave the country by Jan. 31, a move that comes a day before diplomats hold talks to address the worsening relationship between the two countries.

Foreign Ministry officials on Wednesday indicated that the decision to remove the U.S. Embassy staff was in retaliation for Washington's expulsion of more than 50 Russian diplomats by June 30, in line with previously imposed term limits.


Covid-19 Cases Nearly Double in South Africa as Omicron Reaches More Countries

Newly reported cases of Covid-19 almost doubled Wednesday in South Africa, the country with the highest number of identified cases of the new Omicron coronavirus variant, as the U.S. reported its first case of the strain in someone who had returned from a trip to the country.

South Africa's National Institute for Communicable Diseases said the number of reported cases rose from 4,373 on Tuesday to 8,561 on Wednesday. Scientists don't usually focus on daily variations in numbers, but last Wednesday, 1,275 cases were reported.


Omicron Potentially a Stabilizing Force for OPEC+

With the weight of oil markets, member states' fiscal balance sheets and geopolitical interests often pulling it in different directions, OPEC+ can be one unwieldy ship for Saudi Arabia to maneuver. Ironically, the Omicron variant of Covid-19 could prove to be a stabilizing force.


WeWork to Restate Results Due to Classification Error With Its SPAC Acquirer

WeWork Inc. said in a securities filing it would restate several quarters of its results, including its latest one, and that management has concluded there was a material weakness in its internal control.

The office-sharing company, which went public last month through a combination with BowX Acquisition Corp., a special-purpose acquisition company, said Wednesday the reinstatement relates to accounting classification of common shares issued as part of BowX's initial public offering.


Disney Elects Susan Arnold as Board Chairman, Replacing Robert Iger

Walt Disney Co.'s board of directors has elected Susan Arnold its new chairman, replacing Robert Iger, the longtime chief executive who is set to depart from the company later this month.

Ms. Arnold, whose career in business has included positions at the Carlyle Group Inc. and Procter & Gamble Co., has been a Disney board member since 2007 and is to become chairman on Dec. 31. She most recently served as its lead independent director.


Square Changes Name to Block, Days After CEO Jack Dorsey Leaves Twitter

Square Inc., the financial-services company co-founded and led by former Twitter Inc. chief Jack Dorsey, is changing its corporate name to Block Inc.

The change will be effective later this month, the company said Wednesday. Its ticker symbol will remain SQ.


Junket Operator Suncity's Group Chairman Resigns

Junket operator Suncity Group Holdings Ltd.'s Chairman Alvin Chau has resigned pending legal proceedings that involve allegations of illegal gambling and money laundering.

The resignation of Mr. Chau was effective from Dec. 1, Suncity said late Wednesday.


Write to


Expected Major Events for Thursday

07:00/ROM: Oct PPI

07:30/SWI: Oct Retail Sales

08:00/AUT: 3Q GDP

08:00/SPN: Nov Unemployment

08:30/EU: Nov EuroCOIN indicator of euro area economic activity

09:00/ITA: Oct Unemployment

10:00/EU: Oct Unemployment

10:00/EU: Oct PPI

10:00/CYP: Nov CPI

11:00/FRA: Oct OECD CPI

15:00/DEN: Nov Foreign Exchange & Liquidity

All times in GMT. Powered by Kantar Media and Dow Jones.

Write to us at

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to

This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

December 02, 2021 00:27 ET (05:27 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.