Earnings boost stocks as markets brace for U.S. inflation data

Economy24 minutes ago (Oct 13, 2021 07:46AM ET)

(C) Reuters. FILE PHOTO: A man looks at stock market monitors in Taipei January 22, 2008. REUTERS/Nicky Loh


By Carolyn Cohn

LONDON (Reuters) – U.S. stock futures ticked up and European stocks reversed early losses on upbeat earnings on Wednesday, though markets were jittery ahead of U.S. consumer price data later in the session and oil dropped from recent multi-year highs.

Concerns about rising inflation are gnawing at optimism about global recovery from the COVID-19 pandemic.

September U.S. CPI is forecast to show a monthly gain of 0.3%, according to a Reuters poll. Minutes of the U.S. Federal Reserve’s September policy meeting are also due later.

“The markets are at a crossroads,” said Giles Coghlan, chief currency analyst at HYCM. “Are we in a stagflationary environment – will we see low growth but high inflation? That’s the concern.”

S&P futures gained 0.17% after the S&P 500 dropped 0.24% overnight, as JPMorgan (NYSE:JPM) reported a rise in third-quarter earnings that beat estimates at the unofficial start of the company earnings season.

European stocks swung from early losses to a gain of 0.5%, helped by an upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH.

UK stocks were little changed.

The MSCI world equity index was flat after dropping in the previous three sessions.

Oil prices fell on the inflation concerns although surging prices for power generation fuel such as coal and natural gas limited losses.

Brent crude dropped 0.56% to $82.95 a barrel, off Monday’s three-year high of $84.60, while U.S. crude fell 0.52% to $80.22, off Monday’s seven-year high of $82.18. [O/R]

Energy supply shortages could “boost headline inflation and curtail growth further if the winter is cold”, Goldman Sachs (NYSE:GS) analysts said in a note.

The dollar fell 0.25% against an index of currencies after hitting a one-year high in the previous session on rising expectations the Fed will announce a tapering of stimulus next month, with interest rate hikes following next year.

Three U.S. Federal Reserve policymakers on Tuesday said the U.S. economy had healed enough for the central bank to begin to withdraw its crisis-era support.

The dollar steadied at 113.55 yen after hitting its highest in nearly three years against the Japanese currency on Tuesday. The euro was up 0.29% at $1.1561, recovering from the previous day’s 15-month lows.

Yields on two-year U.S. Treasury notes steadied at 0.35% after hitting 18-month highs on Tuesday.

Germany’s 10-year yield fell 2.5 basis points to -0.125% after rising to -0.085% earlier, its highest since late May.

“There is pressure from the inflation story,” said Charles Diebel, head of fixed income at asset manager Mediolanum, pointing to increased expectations of UK rate hikes.

“People are worrying about the same happening elsewhere, they fear inflation will be so persistent central banks will be forced to respond.”

MSCI’s broadest index of Asia-Pacific shares outside Japan clawed back some ground, rising 0.36% after falling over 1% a day earlier, its worst daily performance in three weeks.

Positive trade figures from China, which showed export growth unexpectedly accelerated in September, provided some relief to those worried about a slowdown in the world’s second-largest economy.

The data helped Chinese blue chips jump 1.15%, despite continued weakness in real estate stocks.

Japan’s Nikkei shed 0.32%, as high energy prices and a weak yen mean trouble for a country that buys the bulk of its oil from overseas.

Gold, used as a hedge against inflation, rose 0.66% to $1,772 an ounce.


Earnings boost stocks as markets brace for U.S. inflation data

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Stories

Enjoying my content?

Join the exclusive subscription today and get premium articles for free


Supply headaches push down German business morale to six-month...

Economy26 minutes ago (Oct 25, 2021 05:41AM ET) (C) Reuters. FILE PHOTO: Containers are transported...

Huawei CFO Meng Wanzhou returns to work in Shenzhen,...

Stock Markets21 minutes ago (Oct 25, 2021 05:46AM ET) (C) Reuters. FILE PHOTO: Huawei Technologies...

Former Saudi spymaster seeks U.S. help for his jailed...

World42 minutes ago (Oct 25, 2021 05:26AM ET) 3/3 (C) Reuters. Former Saudi intelligence official Saad...

Sudan PM, ministers detained in apparent military coup

2/2 (C) Reuters. FILE PHOTO: Sudan's Prime Minister Abdalla Hamdok and German Chancellor Angela Merkel...

Stocks brace for blockbuster earnings week, pause after 8...

2/2 (C) Reuters. FILE PHOTO: A man wearing a protective face mask, following an outbreak...

HSBC profits rise 74% as economy rebounds from Covid...

HSBC’s profits rose 74% in the third quarter as improving economic conditions allowed the...

Popular Categories