5 things to know before the stock market opens Tuesday

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5 things to know before the stock market opens Tuesday

That was a two-two punch that caused a 652 point nosedive in the Dow Jones Industrial Average, DJIA, on Tuesday.

Moderna's MRNA said the omicron variant of coronaviruses might put up a tough fight against its COVID 19 vaccine. The Fed Chair Jerome Powell then stunned markets with what he described as a hawkish pivot, as he tossed the word transitory to the dustbin of history, and said that the central bank is likely to speed up the pace of tapering and cast the new variant as an inflationary risk.

The Fed has changed their tune very much in the last month, and there was plenty of evidence that they were far behind the inflation curve. The shift in view has some conviction behind it. It would be no surprise to see the markets price in at least three 25 bp hikes for 2022 instead of the two we currently have, if the main downside risks related to omicron are ruled out, said Alan Ruskin, macro strategist at Deutsche Bank.

Thomas Kee Jr., the president and chief executive of Stock Traders Daily, agreed that Powell made a pivot and suggested that the tapering pace could double to $30 billion a month. He said the European Central Bank, not the Fed, is the driving force behind equity infusions.

The central bank officials are wary of repeating the mistake of premature tightening, and the ECB is battling inflation - prices in November surged by the fastest in 30 years. The European Central Bank will decide on whether or not the €68 billion $77 billion a month Pandemic Emergency Purchase Programme will expire as planned in March and whether or not to increase the Asset Purchase Programme as it offers its first staff inflation forecast for 2024.

The decision of the European Central Bank comes in just two weeks, and Kee believes that the ECB's decision is the wild card. Liquidity will be robust, and that will keep the bid in equities that exist now. The free money hasn't dried up yet, he said.

The ADP estimate of private sector employment, the Institute for Supply Management Manufacturing report and the Beige Book of economic anecdotes are due to be released on the economics front as automakers release their monthly sales reports. Powell and Treasury Secretary Janet Yellen go to the House Financial Services Committee to discuss the same topic Tuesday, the Pandemic response at their respective agencies.

The White House is going to increase the testing requirements for international travelers. Politico reported that conservatives are trying to force a shutdown Friday over the Biden administration's vaccine mandate.

A local television report said that the Pfizer PFE, COVID 19 vaccine, used in Israel, had 90% effectiveness compared to Omicron versus 95% versus delta in preventing infection.

The Dow component and tech giant Salesforce.com CRM said fourth-quarter guidance was less than expected, as Bret Taylor was named co-chief executive alongside Marc Benioff.

Hewlett Packard Enterprises HPE beat earnings expectations but missed revenue estimates, as it's high-performance computing and artificial intelligence unit recorded sales growth of just 1%. Information security firm Zscaler ZS raised its revenue outlook for the year.

The market zigs and zags. The Dow industrials YM 00 futures went up more than 300 points as risky assets gained ground.

The yield on the 10 year Treasury TMUBMUSD 10 Y was around 1.50% and oil futures CL. The pullback from nearly $85 a month early in November was overdone, according to strategists at Goldman Sachs.

A lawyer describing her story about an attempt to rent a car at Hertz HTZ, Tesla TSLA, hasn't rolled out yet, but fans snapped up a $50 Cyberwhistle in the mean time.

This man went a bit further and built a one-third sized Taj Mahal replica for his wife.

The emailed version will be sent at around 7: 30 a.m. Eastern.