© Reuters

By Geoffrey Smith 

Investing.com — President Joe Biden will speak on the deteriorating situation with regard to Covid-19 in the U.S. as new infections hit a record high. European power and gas prices surge another 10% as Russia keeps its gas deliveries to a minimum. Stocks are set to open higher after upbeat earnings from Micron (NASDAQ:) and, to a lesser extent, Nike (NYSE:). The Democratic Party is punting a vote on its key spending bill to next year, and the American Petroleum Institute releases weekly inventory data. Here’s what’s moving markets on Tuesday, 21st December. 

1. U.S. Covid-19 cases jump as Omicron becomes dominant strain

Omicron is already the of the Covid-19 virus in the U.S. and spreading fast, according to new estimates from the Centers for Disease Control. The CDC estimated that it accounted for over 70% of new cases in the week through Saturday, up from only 11% the previous week.

Overall infection rates have nearly doubled in that time, hitting an all-time peak of 298,000 on Monday, according to New York Times data. While there is no corresponding rise in hospital admissions to be observed, the rapid spread is already having an effect on the retail and hospitality sectors, as well as forcing a broader increase in absenteeism due to self-isolation.

President Joe Biden will speak on pandemic issue later but is not expected to announce any new restrictions on mobility. The Biden administration said it will distribute 500 million free at-home testing kits to help stem the tide. 

2. European power prices at new records as Russian gas dries up

Europe’s energy crisis took a fresh turn for the worse as incremental Russian gas supplies through a key pipeline 

Wholesale prices for spot power in Germany hit 425 euros ($480) a megawatt-hour, while benchmark prices in the Netherlands touched the equivalent of $50 per million Btu – around 12 times the corresponding price in the U.S. Low renewables output is also forcing utilities to burn more gas to generate power, draining storage that is already far below the usual levels for this time of year.

The stand-off between Russia and the EU and U.S. over Ukraine continues to , with an estimated 175,000 Russian troops massed on the Ukrainian border.

3. Stocks set to open higher after Nike, Micron earnings cheer

Stocks are set to bounce from their harsh sell-off at the start of the week, as encouraged a slightly more bullish reassessment of the current situation.

By 6:30 AM ET (1130 GMT), were up 335 points, or 1.0%, while were up by a similar amount and were up by 1.1%.

Micron reported bumper earnings thanks to sustained high demand from data centers and the auto sector. Its report was , which warned that the rebound in sales growth and margins would start to weaken in the current quarter, against a backdrop of its Vietnamese suppliers still only working at 80% of capacity.

General Mills (NYSE:) reports earnings before the open.

4. Dems punt BBB to next year

There will be no vote on the Build Back Better bill , according to Senate Majority Leader Chuck Schumer.

Schumer said in a letter to other Democratic lawmakers that the gap between the demands of West Virginia Senator Joe Manchin and the rest of the caucus was too large to bridge before the end of the year.

Manchin had objected in particular to the expansion of child tax credits foreseen in the bill, according to various reports, and has argued that the funding for the proposed programs wasn’t solid enough to avoid big increases in the budget deficit in future.

5. Oil rebounds as risk appetite returns; API data eyed

Crude oil prices also rebounded as a degree of risk appetite returned to markets, supported by the sight of power stations in Europe starting up their fuel oil-burning units for the first time in years.

By 6:40 AM ET (1140 GMT), futures were up 1.8% at $69.81 a barrel, while futures were up 1.5% at $72.60 a barrel.

The releases its weekly inventory data at 4:30 PM ET as usual. Analysts expect the government’s data, due on Wednesday, to show a drop of 2.6 million barrels in crude stockpiles from the previous week.

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