Business

US stock futures move higher as traders analyze inflation data

Wall Street futures rose, Treasuries rose and the dollar weakened on Wednesday as traders reviewed previous data showing US inflation hit a nearly 40-year high for focus. on the expectation that the price increase will soon peak.

Futures bets on the blue-chip S&P 500 index gained 0.5%, while those that track the tech-heavy Nasdaq 100 gained about 0.9%.

The dollar fell against the pound, euro and South African rand, with the US currency index against six other currencies down 0.3%.

Yields on the benchmark 10-year US Treasury note fell 0.03 percentage points to 1.72 percent. Two-year yields, which closely monitor interest rate expectations, were also steady at 0.9%.

U.S. consumer prices rose 7% in December from the same month last year, up from an annualized rate of 6.8% in November, data released by the labor department on Wednesday showed. Its gain in December was the strongest since June 1982 but in line with analyst expectations.

Prices rose 0.5 percent in December from November, slightly faster than the 0.4 percent Wall Street economists had forecast.

“This is certainly a bit counter-intuitive, although there is a strong argument to be made that investors are positioned to have a dollar,” said Ian Lyngen, head of US rate strategy at BMO Capital Markets. stronger response”.

Testifying before a Senate banking committee on Tuesday, Federal Reserve Chairman Jay Powell pledged the central bank would tackle high inflation and forecast that supply chain problems would ease this year. and slow down price growth.

Following the data, traders continue to bet that the Fed will raise rates three or four times this year to around 1%.

These calculations – implied by swap markets and widely predicted that the current high inflation rate will disappear as global supply chain bottlenecks caused by disruptions The economic stretch of the coronavirus lockdown is starting to ease – has been cited by investors as supportive for the stock market.

Despite a volatile start to the year, with the S&P 500 down five of seven sessions and the tech-heavy Nasdaq Composite briefly falling into a correction, the S&P index closed Tuesday at lows. about 1.7% below its all-time high.

Tim Graf, macro strategist at State Street, said ahead of the inflation data: “Yes, there will be housing removal coming. “But will that make a meaningful difference to the financial environment for households and corporations?” he added. “We don’t think so maliciously.”

Investors say the US and European stock markets can withstand higher borrowing costs as long as economic strength drives corporate earnings and inflation peaks.

“The fourth-quarter earnings season could also provide the catalyst for the next rally,” said Luca Paolini, chief strategist at Pictet Asset Management.

If higher inflation expectations cause an increase in 10 years Treasury yield, which, in turn, can reduce the amount investors pay for every dollar of a company’s future cash flows, “when the stock is in trouble,” he said.

Elsewhere, Europe’s Stoxx 600 share index gained 0.6% and London’s FTSE 100 gained 0.7%. Hong Kong’s Hang Seng index closed 2.8% higher, with its technology sub-index posting its biggest daily gain since October.

Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button