Thursday November 11th

11-11-2021

Stock futures inch higher after sell-off induced by hot inflation data

U.S. stock index futures inched higher in early morning trading on Thursday following a tech-driven sell-off on Wall Street. Dow Jones Industrial Average futures added about 25 points. S&P 500 futures ticked up 0.4% and Nasdaq 100 futures gained 0.8%. Tesla shares rose more than 3% in early morning trading after CEO Elon Musk sold about $5 billion worth of shares this week, according to financial filings submitted Wednesday. Dow member Disney shares fell more than 5% premarket after the media giant missed on the top and bottom lines of its quarterly results. Disney+ subscribers also came in short of estimates. The major averages dipped on Wednesday after a hot inflation report pushed up bond yields. The rise in yields especially pressured growth pockets of the market. The Dow Jones Industrial Average lost 240 points. The S&P 500 fell 0.8%. The Nasdaq Composite was the relative underperformer, dipping 1.7% as Facebook-parent Meta Platforms, Amazon, Apple, Netflix, Microsoft and Google-parent Alphabet all closed lower. The small-cap benchmark Russell 2000 dropped 1.6% on Wednesday. Fresh economic data released Wednesday showed persistent inflation. The consumer price index, which tracks a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% in October from a year ago, hitting its highest level in three decades. On a monthly basis, the CPI increased 0.9% against the 0.6% estimate. “Inflation remains stubbornly high, to the surprise of many that expected prices to come back to earth sooner,” said Ryan Detrick, chief market strategist for LPL Financial. “The truth is you can’t shut down a $20 trillion economy and not feel some bumps as it restarts, but we are hopeful the supply chain issues will resolve over the coming quarters and inflation should calm down as well.” Following the CPI data, traders moved up their expectations for when the first Fed rate hike would occur. The Fed funds futures market now sees greater odds of the central bank’s first full rate hike coming in July 2022. Investors also took refuge in inflation hedges on Wednesday, like gold and bitcoin. Asia-Pacific stocks were mixed on Thursday, after data released overnight showed U.S. consumer inflation spiked in October. Hong Kong’s broader Hang Seng index rose 1.01% to close at 25,247.99. Mainland Chinese stocks also jumped on the day, with the Shanghai composite up 1.15% to about 3,532.79 while the Shenzhen component gained 1.267% to 14,699.74. The Nikkei 225 in Japan rose 0.59% to close at 29,277.86 while the Topix index gained 0.32% to 2,014.30. South Korea’s Kospi shed 0.18%, closing at 2,924.92. Oil prices were steady on Thursday after falling in the previous session on concerns rising inflation in the United States, spurred by climbing energy costs, may prompt the government to release more strategic crude stockpiles to drive down prices. On Wednesday, Brent crude futures fell by 2.5% and West Texas Intermediate (WTI) futures dropped by 3.3% after reports that U.S. inflation increased at the fastest rate in 30 years pushed the dollar higher and crude inventories in the U.S., the world’s biggest oil consumer, rose after the government released some strategic reserves. Brent crude futures gained 18 cents, or 0.2%, to $82.82 a barrel at 0156 GMT, while WTI futures rose 17 cents, or 0.2%, to $81.51. Gold prices were flat on Thursday after a surge in U.S. consumer prices drove the metal, seen as an inflation hedge, to a five-month peak in the previous session. Spot gold was little changed at $1,850.00 per ounce by 0100 GMT, after hitting its highest since June 15 on Wednesday. U.S. gold futures gained 0.2% to $1,852.00.