- US CPI figures, released Wednesday, may push Fed to trim stimulus more quickly
- Tuesday, Wall Street stocks ended their longest rally since 2017
- Bitcoin continued to trade lower
Key Events
Futures on the Dow, S&P, NASDAQ and Russell 2000 as well as European stocks were in a holding pattern on Wednesday ahead of today's much-anticipated US inflation data.
The dollar recovered, trading higher.
Global Financial Affairs
Economists predict the consumer price index will have climbed 0.6% monthly and 5.9% for the year, the most since 1990. Investors are concerned that this spike in inflation could prompt the Fed to alter its plan to reduce its bond-buying program or raise rates next year.
All four futures contracts on the major US indices were slightly in the red, fluctuating between gains and losses. Contracts on the Dow were the only ones that haven't seen any green this morning.
Today's investor indecision follows yesterday's down day on Wall Street when all major US stock indices closed in negative territory. The S&P 500 declined for the first time in nine sessions.
In Europe, the STOXX 600 index was less than 0.1% higher, with cyclicals including banking and energy up, while consumer staple companies and drugmakers lagged.
Tesla (DE:TSLA) extended its decline on the German bourse, adding a 3% decline to the stock's 12% collapse on Wall Street yesterday. The carmaker posted its deepest plunge in 14 months after its founder, Elon Musk announced that he would sell 10% of his shares in the EV manufacturer.
Michael Burry (made famous after being depicted in the film The Big Short, when he bet on the collapse of the subprime market) has a theory about why Musk is talking about this now. Burry tweeted earlier this week that Musk might be forced to sell shares after offering them as collateral for personal loans.
Earlier Wednesday, most Asian markets closed lower, with one exception, Hong Kong's Hang Seng, which rose 0.74%
China posted inflation data that showed it was surging. China's consumer price index climbed 1.5% in October. According to the National Bureau of Statistics, that's more than double the 0.7% seen in September. The jump to a 13-month high was mainly due to soaring food and fuel prices.
Sino PPI, or wholesale prices, jumped 13.5%. Market participants are concerned that accelerating prices will reduce the ability of the People's Bank of China, the national central bank, to foster growth with stimulus measures, as those would exacerbate spiking inflation. China's Shanghai Composite closed down 0.4%, trimming earlier losses when traders reacted to the news.
Wall Street shares ended their longest winning streak since 2017 during Tuesday's trading, when all major indices retreated from all-time highs.
General Electric (NYSE:GE) soared as much as 7% before the market opened yesterday after the industrial giant announced it would split its conglomerate into three companies. The stock price jumped 5.9% when the market opened and extended its rally higher. However, it trimmed gains intraday to close just +2.65%. The split is hoped to maximize value as each entity would focus on potential high-growth areas without being burdened by a bygone conglomerate.
Yields on the 10-year note pared yesterday's decline, when they dropped to their lowest level in seven weeks.
There appears to be a Treasury crowded trade below the neckline of a small H&S top.
The dollar rose for the first time in four sessions.
The greenback is struggling between potential short-term pressure and its longer-term rising channel. In late September it completed a massive double-bottom since last year.
Gold retreated, ending a four-day advance.
The price confirmed a resistance since July 15, which could turn out to be an H&S bottom. On the other hand, it has been challenging the neckline of a weekly H&S continuation pattern.
Bitcoin declined slightly for the second day, retreating from Monday's record and Tuesday's all-time high.
The cryptocurrency may be headed toward $90,000 after possibly completing a bullish pattern.
Oil slid, giving up gains after the API's inventory report showed stocks had fallen, which also reduced the likelihood that the US would tap reserves.
WTI found resistance by its downtrend line from its Oct. 25 peak.
Up Ahead
- On Thursday UK GDP figures will be published.
- The US bond market is closed in observance of Veterans Day on Thursday.
- US JOLTS Job Openings are reported on Friday.
Market Moves
Stocks
- The STOXX 600 rose 0.2%
- Futures on the S&P 500 were little changed
- Futures on the NASDAQ 100 were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index was little changed
- The MSCI Emerging Markets Index rose 0.3%
Currencies
- The Dollar Index rose 0.1%
- The euro fell 0.2% to $1.1568
- The Japanese yen rose 0.2% to 113.17 per dollar
- The offshore yuan was little changed at 6.3912 per dollar
- The British pound fell 0.3% to $1.3513
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.47%
- Germany's 10-year yield was little changed at -0.29%
- Britain's 10-year yield rose two basis points to 0.85%
Commodities
- Brent crude fell 0.14% to $84.66 a barrel
- Spot gold fell 0.3% to $1,826.86 an ounce