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Pre-Markets in Red to Start a Fresh Week

U.S. stock futures are trading in negative territory while Americans are gearing up to celebrate Thanksgiving Day this Thursday. This will start the holiday season for 2022, which has so far remained terrible for Wall Street. The initial enthusiasm after the release of October’s Consumer Price Index (CPI) and Producer Price Index (PPI) evaporated last week.

Market participants’ expectations that the Fed may relax its stringent monetary policies as the peak inflation seems behind us, have been rejected by several important voting members of the central bank. St. Louis Fed President James Bullard said that the central bank needs to keep raising rates because according to him policy tightening has so far had only limited effects on observed inflation. The target policy needs to rise to at least 5.00% to 5.25% from the current level of just below 4.00% to be sufficiently restrictive.

However, not all the Fed members are in favor of tighter monetary control. Several members have expressed opposite views too. The Fed will release its November FOMC meeting minutes this week, enabling investors to get a better idea of what the central bank is thinking about the interest rate trajectory.

Market participants will closely monitor this holiday season sales under elevated inflation to gauge the health of the U.S. economy. We are yet to receive any signal from the Fed that it would lessen its tighter monetary control anytime soon. At the same time, we are yet to receive any genuine information that the economy may enter into a recession early next year.

Meanwhile, China is yet to recover fully from COVID-19 infections. Recently, three people died of coronavirus, which forced China’s authority to impose lockdown in a few cities again. Last week, it was rumored that China will reopen soon. Moreover, the People’s Bank of China has kept its one-year prime lending rate steady at 3.65%. The five-year rate also remained static at 4.3%.

Going against today’s pre-market trend, shares of The Walt Disney Co. (DIS) jumped nearly 9% following the news that Bob Iger will once again become the CEO of the company replacing the incumbent Bob Chapek. Iger, who served Disney for more than two decades including 15 years as CEO, will get a term of just two years this time.

On the earnings front, desktop PC and notebook developer Dell Technologies Inc. (DELL), resting equipment manufacturer Agilent Technologies Inc. (A) and The J. M. Smucker Co. (SJM), a leading marketer and manufacturer of consumer food and beverage products and pet food and pet snacks in North America, will report their quarterly financial numbers after today’s closing bell.

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