Asian stocks were mixed on Wednesday, and Treasuries reduced a decline as investors contemplated a surprise spike in US inflation that sparked debate over how long Federal Reserve policies can stay ultra-loose.
Stocks fluctuated in Japan and fell in Hong Kong and China. US futures were stable after the S&P 500 fell for the first time in three trading sessions, while the Nasdaq 100 ended little changed. Traders digest a press release showing the highest U.S. inflation since 2008, as well as mixed earnings reports from JPMorgan Chase & Co. and Goldman Sachs Group Inc.
The yield curve for government bonds was volatile on Tuesday. Weak demand for the monthly 30-year bond auction sparked a steeper spike that reversed a flattening movement fueled by hot inflation levels in June. The yield on 10-year US Treasuries fell back to around 1.4% on Wednesday and the dollar cut earlier gains.
June U.S. inflationary pressures beat forecast, pointing to higher post-pandemic reopening costs. Fed officials have stated that they believe these pressures will be temporary, but some commentators see the risk of more permanent hikes that could force stimulus reductions faster than expected. Traders will be scrutinizing the testimony of Fed chief Jerome Powell this week.
“The debate is about where inflation will settle, if things normalize in about a year – is it north of 2% or south of 2%?” Jimmy Chang, chief investment officer at Rockefeller & Co., said Bloomberg Television, adding that he expects Powell to sound “pretty low-key.”
Investors are also watching the spread of the more contagious Delta variant of Covid-19, which is hindering recovery from the pandemic in some parts of the world. The unfolding earnings season is also crucial as global stocks neared record highs on optimism about the recovery from the health crisis.
Oil fell after hitting its highest price in more than 2 1/2 years. The prospect of an impending spate of crude oil exports from Iran and other major producers has faded, and the International Energy Agency is warning of a worsening supply crisis.
Ariel Investments Chairman and Co-CEO John Rogers sees “more than a little foam” in the markets and says it is time to be cautious about stocks as interest rates are “significantly higher” than expected will fail.
You can find more market commentary on the MLIV blog.
Here are some events to watch this week:
- The Reserve Bank of New Zealand’s latest rate policy on Wednesday
- Bank of Korea money decision on Thursday
- China’s GDP in the second quarter, key economic indicators on Thursday
- Federal Reserve Chairman Jerome Powell appears before the Senate Banking Committee to present the biannual monetary policy report to Congress on Thursday
- Bank of Japan rate decision on Friday
These are some of the key moves in financial markets:
Stocks
- S&P 500 futures were stable as of 10:53 a.m. in Tokyo. The S&P 500 fell 0.4%
- Nasdaq 100 futures rose 0.1%. The Nasdaq 100 has not changed much
- Japan’s Topix index rose 0.1%
- Australia’s S & P / ASX 200 index rose 0.4%
- South Korea’s Kospi Index fell 0.3%
- Hong Kong’s Hang Seng Index lost 0.4%
- China’s Shanghai Composite Index lost 0.6%
Currencies
- The Japanese yen was trading at 110.52 per dollar, up 0.1%
- The offshore yuan stood at 6.4794 per dollar
- The Bloomberg Dollar Spot Index lost 0.1%
- The euro was trading at $ 1.1779
tie up
- The US 10-year Treasury yield fell about two basis points to 1.40%
- Australian ten-year bond yield rose three basis points to 1.35%
raw materials
- West Texas Intermediate crude oil fell 0.1% to $ 75.16 a barrel
- Gold remained stable at $ 1,808.86 an ounce
Before it’s here, it’s at the Bloomberg Terminal.
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source https://thedailytradingnews.com/stock-market-today-dow-sp-live-updates-for-jul-14-2021/
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