By Geoffrey Smith
Investing.com — Crude oil prices surged to an eight-month high as OPEC and its allies maintained a united front on the need for output restraint. Covid-19 deaths in the U.S. hit a new record high and President-elect Joe Biden said he wants Americans to wear a mask for the first 100 days of his presidency. The U.S. labor market report is out at 8:30 AM ET and stocks are edging higher on hopes for a stimulus package. Here’s what you need to know in financial markets on Friday, December 4th.
1. Oil surges to eight-month high on OPEC+ deal
Oil prices hit their highest in eight months on a surge of relief that the agreement governing the output of the world’s biggest producers didn’t fall apart at a fractious virtual meeting that spanned four days.
The so-called OPEC+ bloc of producers, which includes Russia, agreed to raise output by 500,000 barrels a day from January in response to rising prices and an improved demand outlook for 2021 thanks to progress in Covid-19 vaccine development.
That went against expectations that the current levels would be locked in for another three months. However, it’s only a quarter of the 2 million b/d increase the group had originally foreseen for January and, crucially for market sentiment, it maintains the appearance of unity in accepting the need for continued output restraint.
By 6:45 AM ET (1145 GMT), U.S. futures were up 1.3% at $46.23 a barrel, while futures, which hit $49.86 earlier in the session, were up 1.3% at $49.33 a barrel
2. Payrolls report due; dollar hits new low vs euro
The U.S. labor market is expected to have strengthened in November, with the creation of 469,000 jobs and a fall in the to 6.8% from 6.9% in October.
A more up-to-date snapshot of the labor market also pointed to some resilience, with falling for the first time in three weeks.
The report is due at 8:30 AM ET as usual. The U.S. will also be released at the same time.
U.S. will also be released at 10 AM ET. Overnight, rose by more than expected to top their pre-pandemic level for the first time. That helped the strengthen to a new 31-month high of $1.2178, less than a week before the European Central Bank’s next policy meeting.
3. Stocks set to open higher on stimulus hopes
U.S. stocks are set to open higher on signs that Congress will approve some kind of stimulus package in the next few days. Senate Majority Leader Mitch McConnell said Thursday that a deal was “within reach” and will talk to House Speaker Nancy Pelosi again today.
However, McConnell’s own plan for a $500 billion package that indemnifies businesses and universities from liability is still far from the $908 billion proposed by a bipartisan group earlier this week that was endorsed by the House leadership.
By 6:30 AM ET (1130 GMT), the contract was up 114 points, or 0.4%; were also up 0.4%, while the contract was up 0.3%.
4. Newsom warns California on lockdowns as deaths hit new record
California Governor Gavin Newsom warned of a three-week lockdown in any area of the state where hospital intensive care units come close to full capacity, putting further pressure on the economy of the U.S.’s richest and most populous state.
Nationwide deaths from Covid-19 hit a second straight daily record for deaths from the disease, at 2,879. That means that the country has suffered the equivalent of three 9/11s in terms of deaths in the past week alone, overwhelmingly among the over-60 population.
President-elect Joe Biden told CNN he would ask Americans to wear masks for the first 100 days of his presidency. Biden also said he would ask Dr. Anthony Fauci to continue to serve under him.
5. Fauci rows back vaccine criticism; Pfizer ‘s vaccine glitch
Fauci was in the news himself, rowing back criticism of U.K. health regulators for what he had called an over-eager authorization of the Pfizer-BioNTech vaccine this week. The U.K. is due to start vaccinating people next week.
Pfizer (NYSE:) stock had fallen in after-hours trading on Thursday after The Wall Street Journal reported that supply chain problems had led to lower near-term availability of the vaccine. The two companies had hoped to roll out 100 million doses worldwide by the end of the year, but now expect only 50 million. Their target for over 1 billion doses in 2021 remains unchanged however.