Wall Street pointed modestly higher ahead of the Federal Reserve’s last policy meeting of 2022, where it’s expected the central bank will raise its main lending rate by another half-point.
The precautions come as the number of cases appeared to be rising, though a sharp reduction in the number of tests being administered makes measuring any changes difficult.
President Xi Jinping’s government is officially committed to stopping virus transmission, the last major country to try. But the latest moves suggest the ruling Communist Party has decided to tolerate more cases without quarantines or shutting down travel or businesses as it winds down its “zero-COVID” strategy.Shares in e-commerce and other tech-related companies that thrived during the days of lockdowns as home deliveries soared were sharply lower. Meituan fell 7% and Baidu also dropped 7%.
Tokyo’s Nikkei 225 index gave up 0.2% to 27,842.33 after a survey of Japanese manufacturers released Monday showed a sharp deterioration in their outlook, with recession a growing possibility in the U.S. and other major markets. The business survey index fell to minus 3.6% in October-December from 1.7% in the previous quarter as manufacturers grappled with high prices for energy and other raw materials.The Kospi in Seoul lost 0.7% to 2,373.02 and Australia’s S&P/ASX 200 declined 0.
The Fed has been battling inflation by aggressively raising interest rates to raise the cost of borrowing and slow economic activity. The central bank has already hiked its key overnight rate to a range of 3.75% to 4%, up from basically zero as recently as March. Stocks have been battered this year by the withdrawal of pandemic stimulus and rising rates, which make other investments more attractive. They’ve recovered some of their losses recently, as inflation has slowed since hitting a peak in the summer. But price gains remain high, raising the risk the Federal Reserve will have to keep hiking interest rates sharply to get it fully under control.In other trading Monday, U.S. benchmark crude oil lost 30 cents to $70.
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