Stimulus Passed; GDP, API Due; Apple Cars - What's up in Markets

By Geoffrey Smith 

Investing.com -- Congress has sent the stimulus bill to President Trump for signing. The U.S. will release revised GDP data for the third quarter (the U.K. revised its data up sharply overnight). Apple is back in the self-driving car business and oil faces a test with the first of two weekly reports on U.S. inventories. Here’s what you need to know in financial markets on Tuesday, December 22^nd.

1 Senate sends stimulus bill to Trump

The U.S. Congress passed the $900 billion coronavirus relief bill, sending it to President Donald Trump for its signature into law.

In addition, the Senate also passed a $1.4 trillion spending bill that will keep the government funded through September.

President-elect Joe Biden signaled he will push for a new support package as soon as he is sworn in. Lawmakers on both sides acknowledged the shortcomings of the deal, which leaves unanswered big questions about the funding for local governments and the potential liability of businesses whose employees catch the coronavirus.

2 GDP revisions in U.S. and U.K.

The relatively empty data calendar will allow revised third-quarter data for gross domestic product at 8:30 AM ET (1330 GMT) to grab more attention than they might otherwise attract. 

The headline annualized growth number is more likely to be revised up than down from the initial reading of 33.1%, if recent experience is any guide, but the data have now largely been overtaken by new realities in any case.  

Analysts are focusing on the core personal consumer expenditures, which provide a more accurate reflection of experienced inflation in the current circumstances, because it adjusts for short-term changes to spending patterns.  The first reading had this index up 3.5% on the year, well above the official inflation rate. Separately, existing home sales data are also due at 10 AM ET.

Overnight, the U.K. revised up its third-quarter numbers to show a quarter-on-quarter rebound of 16%, which still left output down 8.6% on the year.

3 Stocks set to open mixed

U.S. stock markets are set to open mixed after a surprisingly resilient performance on Monday, when the sight of the country’s banks gearing up to resume stock buybacks calmed fears about a fresh surge in the pandemic from the new strain of Covid-19 virus detected in Europe and Africa.

By 6:40 AM ET (1140 GMT), Dow Jones futures were down 37 points, or 0.1%, while S&P 500 futures were up 0.1% and NASDAQ futures were up 0.4%.

Stocks likely to be in focus later may include Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB), after fresh revelations about the extent of their cooperation in the online advertising market that the two have come to dominate. Traders will also be looking at whether SolarWinds (NYSE:SWI) stock can build on its 13% bounce on Monday, after a 40% drop in response to news about a devastating hack on U.S. government agencies that exploited weaknesses in its system.

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4 Apple revives self-driving car project

Apple (NASDAQ:AAPL) has revived its plans to build and market self-driving cars and is targeting a product launch in 2024, Reuters reported overnight.

The company had eased off on its so-called Project Titan after seeing the problems encountered by others such as Uber (NYSE:UBER) and Google, and laid off nearly 200 people on the project last year. However, Reuters reported that its designs have advanced to a point where it can plan on hitting the mass market in a little over three years. It cited a new battery design that could "radically" reduce the cost of batteries and increase the vehicle's range.

It isn’t clear how Apple would approach the task of mass manufacturing. It has traditionally outsourced that process for products as the iPhone, but there is no precedent for it among the world’s main automakers.

5 Oil edges lower; API data due

Crude oil prices edged down again in quieter trade overnight, after a bruising drop on Monday in response to fears that the discovery of a new strain of Covid-19 virus could lead to wider and longer lockdowns in the new year.

By 6:40 AM ET, U.S. crude futures were down 0.9% at $47.58 a barrel, while Brent futures were down 0.6% at $50.61.

The U.K. and France are still negotiating over how and when to reopen the Channel Tunnel, a vital artery for trade, which was closed on Sunday night as part of a general ban on arrivals from the U.K. The closure threatens to cause shortages of fresh food in the U.K. – a big net importer – if not quickly addressed.

Later in the session, the American Petroleum Institute will report its weekly assessment of U.S. oil inventories.