Wall Street Traders on Hold in Run-Up to CPI Data: Markets Wrap

Wall Street Traders on Hold in Run-Up to CPI Data: Markets Wrap

In financial markets, stocks, bonds, and the dollar experienced modest movements as investors awaited Thursday’s inflation data for insights into the Federal Reserve’s outlook. The S&P 500 registered a slight increase, while US 10-year yields hovered around 4%. Bitcoin was trading around $45,000 ahead of a crucial decision by the US Securities and Exchange Commission regarding the approval of exchange-traded funds (ETFs) holding the digital asset. Oil prices exhibited volatility as an unexpected increase in US stockpiles offset concerns about supply disruptions in the Red Sea.

Market participants are closely monitoring inflation trends, with expectations that it will likely end the year around the Federal Reserve’s 2% target. The upcoming consumer-price index (CPI) release is anticipated to provide indications of the disinflation trend. New York Fed President John Williams is scheduled to speak, contributing to the overall sentiment in financial markets.

Arthur Hogan at B. Riley Wealth remarked on the current market conditions, stating, “We’re seeing a plausible path to inflation continuing to ease gradually, an end to Fed rate hikes, and a re-acceleration of economic growth in the back half of 2024.”

Key corporate highlights include upcoming fourth-quarter earnings reports from major US banks, including Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo. These results are expected to reflect continued pressure on net-interest margins due to higher funding costs. Boeing’s CEO, Dave Calhoun, acknowledged the company’s need to address its shortcomings in the wake of a safety incident that raised concerns about the quality of its manufacturing. Additionally, Hewlett Packard Enterprise agreed to acquire Juniper Networks for $14 billion, a move aimed at expanding its presence in networking but met with skepticism on Wall Street.

Key economic events scheduled for the week include US CPI and initial jobless claims on Thursday, and China’s CPI, PPI, and trade data on Friday. Other events include UK industrial production, US PPI, and speeches by Minneapolis Fed President Neel Kashkari and ECB chief economist Philip Lane.

As of the latest market movements:

  • The S&P 500 rose 0.3%
  • The Nasdaq 100 rose 0.4%
  • The Dow Jones Industrial Average rose 0.2%
  • The Stoxx Europe 600 fell 0.2%
  • The MSCI World index rose 0.2%

In currency markets:

  • The Bloomberg Dollar Spot Index was little changed
  • The euro rose 0.3% to $1.0967
  • The British pound rose 0.2% to $1.2736
  • The Japanese yen fell 0.8% to 145.61 per dollar

Cryptocurrency movements:

  • Bitcoin rose 0.4% to $45,630.71
  • Ether rose 5.8% to $2,451.22

Bond market developments:

  • The yield on 10-year Treasuries declined one basis point to 4.00%
  • Germany’s 10-year yield advanced one basis point to 2.20%
  • Britain’s 10-year yield advanced one basis point to 3.80%

Commodity market highlights:

  • West Texas Intermediate crude was little changed
  • Spot gold fell 0.1% to $2,027.63 an ounce