Key topics to remember:
Stock index futures point to a higher opening, as President Joe Biden is expected to signal the infrastructure bill. In addition, President Biden is scheduled to meet with Chinese President XI Jinping on Tuesday to discuss issues of tariffs and supply chains. On Michigan Customer sentiment hit its lowest point in a decade. Inflation is hurting customers and slowing the recovery in the United States and Europe.
The Dow Jones Industrial Average ($DJI) can take advantage of a condiment thanks to one of its components. Boeing (BA) rose more than 3% in pre-market trading following reports that the company won several aircraft orders after the 2021 Dubai Air Show.
Another electric vehicle manufacturer is going public. Swedish automaker Polestar Automotive merges with special lens acquisition company Gores Guggenheim (GGPI). Gores was up about 14% before the market opened.
Despite back-to-back five-week winning streaks on Friday, major indices still closed higher during the day. Unfortunately, stocks couldn’t get up enough to make up for previous losses on the week. Materials, the most productive performance sector last week, rose about 2. 5% However, a varied organization of stocks made moves on Friday that helped the rally.
In terms of profits, British pharmaceutical company AstraZeneca (AZN) fell 6. 55% on Friday after lacking profit estimates. The company had particularly high expenses similar to the acquisition of Alexion.
One of the reasons for this contradiction may also simply be the “K” recovery: studies show that many administrative employees find new opportunities that allow them to paint from home, possibly having more savings or non-public investments and a greater retirement. These points can give them confidence to quit their jobs.
Whereas in many cases, blue-collar workers may not have as many options. Many of them have lower salaries combined with limited opportunites and therefore feel the effects of inflation at a greater rate. So, while stocks could still rally as the economy strengthens, there’s obviously a group of people that are not feeling the effects of the recovery.
Much of Europe has been rallying with the S&P 500 (SPX). The French CAC 40 (PX1:ENI) and the United Kingdom’s FTSE 100 (FTSEMIBN:FTSE) were also experiencing five-week win streaks. However, their battles with inflation and energy shortages are still potential roadblocks. Gas and heating oil prices have moved during the autumn months resulting in benchmark gas prices rising to four times higher than normal. In fact, the UK is seeing record gas prices equal to $7.40 per gallon in the United States.
Additionally, much of Europe is seeing seasonal temperatures drop. According to Bloomberg, Italy, Southern France, Spain, and Germany are forecasting lower-than-normal temperatures next week. And the UK’s top energy supplier warned its customers that the icy temperatures could last as long as six weeks.
Next week the eurozone, France, Italy, and the UK announce their respective Consumer Price Index (CPI) numbers. Additionally, the UK’s employment report will also be released. These reports could provide greater insights into how well Europeans are faring with rising energy prices.
European holidays?: Many European cities are already cancelling their Christmas celebrations due to the growing number of COVID-19 cases. The World Health Organization (WHO) reported a 10% increase in Europe during the following week. Russia and Eastern Europe.
Western Europe seems to be doing better, which the WHO attributes to higher vaccinations rates. Nonetheless, some countries are already taking measures. The Dutch government announced three weeks of partial lockdowns, and German lawmakers are meeting to consider potential measures. However, many German cities went ahead with their outdoor Carnival celebrations despite the rising case count.
The United States ended its international travel restrictions on Monday, allowing vaccinated travelers to enter the country. So far, there are no plans to bring the restrictions back, and airlines are not reporting any increases in international customer cancellations.
Book’em: Travelport is finding that international flights to the United States reached 70% of prepandemic levels. The majority of these flights come from the UK, Germany, France, Italy, and Spain. Delta (DAL) announced that it has seen a 450% surge in international flight bookings in the six weeks following the announcement of the repeal of the international flight ban.
Americans fly for a small turkey. According to Adobe Digital Insights, airline bookings are up 78% for Thanksgiving from last year, as a result, airfares have also increased and are approaching 2019 prices.
Turbulence: In addition to the backlog of COVID-19 cases and potential government actions, airlines are facing other problems. The International Air Transport Association (IATA) reports that jet fuel rates have increased by 125. 7% compared to a year ago in the European Union. and the Commonwealth of Independent States, through 105 per cent in North America and 116. 8 per cent in Latin and South America. However, last week, fuel charges fell 1. 1% overall. reduce the profitability of the airline. These charges may result in an increase in price ticket charges.
Perhaps it was a smart thing for vacation travelers that staffing issues occurred before the holiday season, as airlines struggle to control their staffing issues to lessen turbulence during the holidays.
TD Ameritrade Comments® for educational purposes only. Member of the SIPC.