Market Digest Wed 15 Dec: US inflation hits a record, what it means for you and hot stocks this month Market Digest Wed 15 Dec: US inflation hits a record, what it means for you and hot stocks this month Market Digest Wed 15 Dec: US inflation hits a record, what it means for you and hot stocks this month

Market Digest Wed 15 Dec: US inflation hits a record, what it means for you and hot stocks this month

Equities 4 minutes to read
Jessica Amir

Market Strategist

Summary:  Investors are betting the US Fed will hike rates and put it on a roadmap when it ends its two day meeting Wednesday, as a second US inflationary read last night showed prices are rising at record levels. Investors are transitioning their portfolios for the new rate cycle and profit taking, seeing the US top 500 index fall 1.7% from Monday to Tuesday after falling 0.8% overnight, while the Nasdaq has lost 2.5% Monday to Tuesday after falling 1.2% overnight. Here is why to watch stocks with low PEs, in key themes and stocks benefiting from inflation. Plus, the three elements to watch today.

Firstly  -  let’s start paying attention to what lies beneath the numbers and moves

What to know about the overnight session?

The market was spooked by US wholesale inflation data, showing that prices are rising at a record pace. Wholesale prices, as measured by PPI showed prices rose of 9.6% in year on year to November, which is a hotter pace of price growth than the 9.2% expected by economists. For investors, it’s another confirmation that the Fed will act to rise rates as the White House has given the Fed a mandate not to let inflation run hot (and it is). The White house doesn’t want prices to rise – it hurts consumers and next election’s voters.

Also, for investors, we should really dive into the detail and see which prices rose the most - you can see where momentum is building and look at stocks and commodities benefiting; final demand energy prices jumped another 2.6% in November, food prices rose 1.2%, Transportation and warehousing rose 1.9%, while portfolio management spiked 2.9%. Elsewhere, iron and steel scrap prices surged 10.7%, meanwhile others costs from gasoline, fruit and vegetables and industrial chemicals also increased.

It’s also absolutely critical to be aware…investors are pre-empting this new cycle for markets as they expect three rate hikes in 2022 – so many are positioning their portfolios accordingly… favouring mega caps in key themes, plus stocks with low PEs and less debt to earnings, so they can weather the storm. This is reflected in the performance US stocks this month; Dollar Tree is up 25% (it has a relatively low PE of 23 times earnings, meaning you pay for the shares 23 times before you receive any likely earnings), Moderna’s shares are up 17% this month, it has a PE of 17 times earnings and Apple share are up 13% this month, it has a PE of 31 times earnings.

Secondly, watch companies with Australian analyst rating changes

AWC AU: Alumina Raised to Overweight at JPMorgan; PT A$2.10

BIO AU: Biome Australia Rated New Speculative Buy at Canaccord

CSL AU: CSL Raised to Positive at Evans & Partners Pty Ltd; PT A$315

CSL Raised to Buy at Citi; PT A$340

MQG AU: Macquarie Group Rated New Overweight at Barrenjoey; PT A$230

S32 AU: South32 Rated New Buy at Investec; PT A$4.63

Thirdly, what else to watch today; company and economic news

Annual General Meetings: AGH AU, ANP AU, NZL NZ, SHM AU, WBC AU

Other Shareholder Events: EQR AU, MLX AU

Sales Results to watch: AIA NZ: Auckland Airport Nov. Total Passengers Y/y -89.1%

Other/M&A: CPU AU

Companies in the news

CSL AU: Australia’s CSL to Buy Drugmaker Vifor for $12.3 Billion / Vifor Catapults CSL in Renal Disease and Helps Diversify: Reaction

Wesfarmers WES will vote against Woolworths WOW bid for API. Why is this a big deal? Wesfarmers owns 19.3% of API.

Piedmont Lithium PLL US reports the results of a bankable feasibility study for its proposed integrated lithium hydroxide business in Gaston County, North Carolina.

BHP AU: La Nina’s Threat Extends Beyond Farming to Iron and Coal Fields

Challenger CGF AU Names Nick Hamilton to Succeed Richard Howes as CEO

Afterpay to Delist After Block Deal Gets Nod

Economic news to watch today

Westpac Consumer Conf SA MoM, prior 0.6%

Westpac Consumer Conf Index, prior 105.3

Tomorrow consumer confidence, prior 105.3.

Remember Thursday we get employment data: ‘Record Jobs Likely as Hidden Workers Return’.

Markets -  the numbers

ASX200 ASX SPI 200 futures down 0.6% to 7,338.00

US Major indices fell on Tuesday: S&P 500 fell 0.75%, Nasdaq fell 1.1%, Dow fell 0.3%

Europe indices closed lower: Euro Stoxx 50 lost 0.9%, London’s FTSE 100 fell 0.2%, Germany’s DAX lost 1.1%

Asian markets closed lower: Japan’s Nikkei fell 0.7%, Hong Kong’s Hang Seng lost 1.3%, China’s CSI 300 fell 0.7%. Australia’s ASX200 closed flat

Commodities: Iron ore fell 2.2% to $112.85 but holds October high, Gold spot down 0.8% to $1,772.46, Brent futures down 1.3% to $73.46/bbl

Currencies: Euro down 0.2% to $1.1259, Aussie down 0.3% to 0.7107 per US$, Kiwi down 0.2% to 0.6743 per US$

Bonds: U.S. 10-year yield rose 2.0bps to 1.4360%, Australia 3-year bond yield fell 4bps to 0.85%, Australia 10-year bond yield fell 6bps to 1.54%


Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.