Stocks Lack Momentum and Direction Ahead of Inflation Report

Barry Adams
11 Oct, 2022
New York City

Stocks on Wall Street in early trading struggled to trade above flat-line ahead of consumer inflation data on Wednesday. 

The S&P 500 index increased 0.4% to 3,625.77 and the Nasdaq Composite index added 0.1% to 10,554.66. 

Crude oil futures for the immediate month declined $1.59 to $89.50 a barrel but natural gas rose 10 cents to $6.54 a thermal unit. 

The yield on 2-year Treasury notes decreased to 4.29%, 10-year Treasury notes fell to 3.89% and 30-year Treasury bonds dropped to 3.89%.

   

European Markets Extend Losses to 5th Day 

European markets extended losses for the fourth day in a row on the rising tensions in Ukraine. 

Investors are worried that the aggressive rate tightening is likely to depress corporate earnings and dip the economy into a recession and inflation may remain elevated longer than expected. 

The DAX index declined 0.4% to 12,220.25, the CAC-40 index decreased 0.1% to 5,833.20 and the FTSE 100 index dropped 1.1% to 6,885.23.  

The euro traded near 97.77 U.S. cents and the British pound closed at $1.117. 

The yield on 10-year German government bonds rose to a 11-year high and the Bank of England expanded its bond market intervention to include inflation-linked bonds. 

German bund yields rose after reports suggested that German Chancellor Olaf Scholz is prepared to back European Union-wide joint debt issuance to tackle the surging costs of energy imports. 

G7 leaders conducted a virtual meeting and discuss additional steps after Russia stepped up its bombing across Ukraine following an attach on a bridge linking Ukraine and Crimea. 

The yield on 10-year German bonds was nearly unchanged at 2.29%, French bonds closed down 2.885%, British Gilt at 4.41% and Italian bonds to 4.663%. 

Brent crude oil declined 1.8% to $94.49 a barrel and TTF natural gas price edged up a fraction to 154.50 euros a megawatt hour. 

The UK jobless rate fell to the lowest level since 1974 after more people dropped out of the labor force and employers struggled to fill vacancies. 

The UK jobless rate declined to 3.5% in the three months to August from 3.6% in the period to July, the data from the Office for National Statistics reported Tuesday. 

 

Asian Markets Look Down 

Asian markets traded lower reflecting a growing list of global worries, reflecting earnings anxieties and another Covid-19 virus flare in China. 

The Nikkei 225 average decreased 2.64% to 26,401.25 and the Topix index fell 1.86% to 1,871.24, after a 3-day weekend. 

Tech stocks in China led the decliners after the U.S. tightened semiconductor technology and equipment sale restrictions. 

The Shanghai index closed higher 0.2% to 2,979.79 after COSCO Shipping Holdings Co Ltd offered a positive outlook.  

The benchmark indexes in India fell on the worries that the rising U.S. dollar will stoke worldwide inflation and slow down economic growth rate. 

The Sensex closed down 843.79 points or 1.46 percent, to 57,147.32 and the Nifty index fell 257.45 points or 1.49% to 16,983.55.

The tech heavy Kospi average fell 1.83% to 2,192.07 following a 3-day holiday and investors turned cautious ahead of the U.S. consumer inflation data on Wednesday.