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%


The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo 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 or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

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. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

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

The information or the products and services referred to on this site 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 are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

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