Cooler Inflation Sparked Stock Rally Cut by Missiles Landing In Poland

Barry Adams
15 Nov, 2022
New York City

Stocks on Wall Street opened sharply higher after wholesale inflation cooled in October, the second inflation measure to cool in as many week. 

The lighter-than-expected inflation data offered another ammunition to policymakers advocating a slower rate hike at the next policy meeting in December. 

Benchmark indexes trimmed most of the day's gains after news reports suggested Russian missiles landed in Poland, killing two people. 

Crude oil prices rose 94 cents to $86.82 a barrel and natural gas prices increased 13 cents to $6.14 a thermal unit.

In stock trading, indexes advanced and tech stocks led the gainers.

The S&P 500 index advanced 0.9% to 3,991.73 and the Nasdaq Composite index increased 1.5% to 11,358.41. 

Among widely held tech stocks, Apple, Amazon, Tesla, Microsoft and Alphabet jumped between 0.2% and 2%.

Technology, real estate, communications systems, consumer staples and financial sectors jumped between 0.5% and 1.2%.

 

Wholesale Inflation Cools In October 

The Producer Price Index increased 0.2% in October from the previous month, matching the downwardly revised rate in September, the U.S. Bureau of Labor Statistics said Tuesday.  

The 5.7% jump in gasoline prices drove the goods cost 0.6% higher, the fastest increase since 2.2% rise in June.

However, services costs declined 0.1% in the month, the first decline since November 2020.

The PPI rose 8.0% from a year ago following the 8.4% surge in September and the smallest increase since July 2021.

The yield on 2-year Treasury notes fell to 4.34%, 10-year notes declined to 3.77% and 30-year bonds eased to 3.97%.

 

U.S. Market Movers 

Taiwan Semiconductor soared 11.9% to $81.21 after Warren Buffett controlled Berkshire Hathaway said in a filing with the Securities and Exchange Commission purchased $4.1 billion of stock in the third quarter.

Home Depot increased 2.2% to $314.27 after the retailer reported better-than-expected revenue and earnings in its latest quarter and reaffirmed its annual outlook.

Energizer Holdings Inc jumped 6.9% to $31.67 after the company reported stronger-than-expected quarterly results.

Walmart Inc soared 7.8% to $148.20 after the retailer said fiscal third quarter revenue rose 9% to $152.81 billion and swung to a net loss of $1.8 billion or 66 cents a share from a profit of $3.11 billion or $1.11 a share a year ago.

The retailer also announced a nationwide opioid settlement of $3.1 billion without admitting liabilities with state, local and tribal governments.

The company also said the boost in sales at its e-commerce India-based arm, Flipkart.com, also  helped results in the quarter.

Getty Images Holdings Inc dropped 13.6% to $6.02 after the stock image marketplace operator reported quarterly earnings ahead of expectations but sounded cautious outlook.

Bath & Body Works jumped 3.5% to $34.25 after hedge fund Third Point controlled by Dan Loeb revealed a stake of $265 million in the company.

Vodafone Group Plc declined 6.4% to $11.54 after the mobile communication services provider lowered its earnings and cash flow outlook.  

 

Eurozone Economic Growth Slows  

Seasonally adjusted eurozone gross domestic product in the third quarter rose 0.2% from the second quarter, Eurostat said Tuesday.

From a year ago, the economy advanced 2.1% in the third quarter after rising at 4.3% in the second quarter.

On a  monthly basis, seasonally adjusted eurozone and EU employment in the third quarter expanded at a slower pace of 0.2% following a 0.4% rise in the second quarter, Eurostat also reported.

 

Eurozone Employment Growth Slows 

The eurozone employment on an unadjusted basis increased 1.7% in the third quarter compared to 2.7% in the second quarter and in the EU expanded 1.5% from 2.4% on an annual basis.

 

Eurozone International Trade Swings to Deficit 

The statistical agency also reported imports from outside the region soared at a faster pace than than exports in September.  

Imports in the month soared 44.5% and exports advanced 23.6% from a year ago resulting in a large trade deficit.

International trade swung to a deficit of 34.4 billion euros from a surplus of  6.7 billion euros a year ago.  

German wholesale price increase slowed to 17.4% in October from 19.9% in September, Destatis reported Tuesday.

The French jobless rate fell to 7.3% in the third quarter from 7.4% in the second quarter, Insee reported Tuesday.

 

European Markets Extend Multi-month Gains 

European markets extended gains for the fourth day in a row and investors focused on the barrage of domestic economic data.

The DAX index increased 0.5% to 14,378.51, the CAC-40 index advanced 0.5% to 6,641.66 and the FTSE 100 index declined 0.2% to 7,369.44.

The euro inched lower to $1.031 and the British pound edged up to $1.812.

Brent crude oil gained 53 cents to $93.56 a barrel and TTF natural gas prices jumped 9.2% to 124.10 euros a MWh.

 

Europe Market Movers 

Credit Suisse declined 0.2% to 4.28 Swiss francs after the troubled investment bank said it plans to sell a substantial portion of its securitized products group to Apollo Global Management.

Leoni AG fell 0.8% to