Nasdaq Soars 7% On One Sign of Moderating Inflation

Barry Adams
10 Nov, 2022
New York City

Benchmark indexes soared, gold advanced, Treasury yields fell and the U.S. dollar inched lower after inflation fell in October. 

The slight cooling of inflation lifted hopes that the Federal Reserve may not have to lift rate at a rapid pace. 

Benchmark indexes surged the most since April 2020 after the beaten down tech stocks led the gainers. 

 

Consumer Price Inflation Slows to 0.4% 

Consumer price index in October rose at a slower pace than expected but remained elevated. 

The CPI index increased 0.4% from September and advanced at a slower pace of 7.7% from a year ago, the U.S. Bureau of Labor Statistics reported Thursday. 

The inflation rose at the slowest pace in January and the annual pace of increase slowed from 8.2% in September. 

The increase in goods prices have slowed in recent months but services prices continue to rise at a rapid pace and inflation remains stubbornly high. 

The index for shelter (or equivalent to rent or home ownership) contributed to half of the monthly gain and the index for gasoline and food continued to rise. 

The consumer price inflation, excluding food and energy, slowed to 0.3% in the month from 0.5% rate in September and eased to 6.3% from 6.5% rate in the previous month. 

The yield on 2-year Treasury notes eased to 4.33%, 10-year Treasury notes fell to 3.81% and 30-year Treasury bonds inched lower to 4.05%.

 

Gold Advances, Dollar Eases

precious metals rose after the dollar fell against major currencies. 

Gold surged 2.9% or $50.60 to $1,756.91 an ounce and silver added 3.4% to $21.73 an ounce. 

The euro traded up to $1.02 and the UK pound inched up to $1.17.  

Crude oil rose 57 cents to $86.40 a barrel and natural gas futures rose 27 cents to $6.14 a thermal unit. 

 

U.S. Movers 

Stocks surged and benchmark indexes jumped the most in two years after consumer price inflation eased and raise the prospect of peaking inflation. 

The S&P 500 index soared 5.5% to 3,956.37 and the Nasdaq Composite index surged 7.4% to 11,114.15. 

Among widely held stocks, Apple, Amazon, Facebook parent Meta, Microsoft and Tesla soared between 7% and 11%. 

Semiconductor stocks also participated in the market rally and Lam Research and KLA Corp, Intel and AMD soared between 12% and 6%. 

Resource sector stocks also advanced after gold and silver rebounded and the U.S. dollar edged lower. 

Barrick Gold and Newmont Corporation surged more than 7%. 

ZipRecruiter jumped 15.8% to $16.88 after the online jobs site operator reported better-than-expected quarterly results and expanded its stock repurchase program. 

Revenue in the third quarter increased 7% to $227.0 million from $212.6 million a year ago. 

Net income in the quarter declined to $20.6 million from $22.0 million and diluted earnings per share was unchanged at 17 cents. 

The company announced a stock repurchase program of $200 million in addition to the previously announced $250 million.   

As of September 30, 2022, the remaining amount available to repurchase under the previously authorized share repurchase program was $49.9 million, the company noted in its earnings release. 

Rivian Automotive Inc soared 16.9% to $32.82 after the company reported smaller-than-expected loss and reiterated its annual production target despite ongoing supply chain challenges.

Third quarter net loss declined to $288 million from $1.23 billion and diluted loss per share fell to $1.88 from $12.21 a year ago. 

 

FTX Meltdown 

The cryptocurrency exchange FTX is facing a liquidity crisis that may lead to the demise of the company that was valued at $32 billion at the beginning of 2022. 

Rival cryptocurrency exchange Binance decided to not bid for the company after conducting initial due diligence of the company's finances and ownership structure. 

Silicon Valley based Sequoia also said in a tweet that it has marked down its $215 million investment in FTX to zero.