Coffee With Greta: Chinese Stocks Jump, Oil Prices Rally

DJIA Futures: -164 (-0.5%)

SPX Futures: -20 (-0.5%)

NASDAQ Futures: -50 (-0.4%)

Good morning friends!

Futures are dropping as traders await more key economic data this week.

Let’s get right to it!

U.S.-Listed Chinese Stocks Rally

Shares of Chinese companies listed in the U.S. are rallying ahead of the open as the country continues to relax Covid restrictions.

Beijing and Shenzhen both said over the weekend they would relax a rule that required negative Covid tests for travel.

The Invesco Golden Dragon China ETF (PGJ), which tracks the Nasdaq Golden Dragon China Index, is up 5.2% ahead of the open.

Alibaba (BABA) shares are up 4.6%, Pinduoduo (PDD) is up 4.1%, while Bilibili (BILI) is surging 17.1%.

Reuters reported China is set to announce a nationwide reduction in Covid testing requirements as the country moves away from its zero-Covid policy.

Treasury yields are mixed this morning as traders look ahead to more economic data this week.

The 2-year yield is up 6 basis points to 4.30% while the 10-year yield is down 1 basis point to 3.52%.

The market is awaiting the latest ISM services PMI after the manufacturing PMI contracted for the first time in more than 2 years last week.

This is also a blackout week for Fed speakers ahead of the bank’s meeting next week.

CME Group’s FedWatch Tool shows 74.7% of traders still anticipating a 50 basis point hike at that meeting while 25.3% expect a 75 basis point move.

Oil prices are rallying this morning after OPEC+ agreed to hold their output targets steady.

West Texas Intermediate crude futures are up 3% to over $82 bbl while Brent crude futures are up 3% to over $88 bbl.

OPEC+ met on Sunday and agreed to stick to the October plan to cut daily output by 2 million barrels from November through 2023.

G7 countries and Australia also agreed last week on a $60 bbl price cap on seaborne Russian oil that takes effect today.

The EU’s ban of Russian crude oil also goes into effect today.

Ford (F) became the number 2 EV maker in the U.S. last week. The automaker reported Friday that it sold 53,752 all-electric vehicles in the U.S. through November, up nearly 103% year over year. That put its share of the U.S. EV market at 7.4% vs 5.7% a year earlier. That pushed Ford past Hyundai as the second-largest EV seller and maker in the U.S., behind Tesla (TSLA).