Stocks Edge Lower On Jump In US Consumer Prices
Stock markets were slightly softer Tuesday on news of the biggest jump in US inflation in more than two decades and disappointment in results from US investment banks
London, (UrduPoint / Pakistan Point News - 13th Jul, 2021 ) :Stock markets were slightly softer Tuesday on news of the biggest jump in US inflation in more than two decades and disappointment in results from US investment banks.
"The core reading of 4.5 percent is perhaps the most notable given that it removes the kind of volatile aspects that the Fed could use to explain away such a rise," remarked Joshua Mahony, market analyst at the online trader IG.
Investors are becoming concerned that strong inflation as countries emerge from Covid lockdowns will cause the US Federal Reserve and other central banks to hike interest rates sooner than expected, hindering the economic recovery.
The Fed has estimated several times that stiff increases in consumer prices will be transitory, and so far the markets have accepted that argument.
But "if today's number doesn't mark the high-water mark, then Fed officials may start to shift a little bit more uncomfortably as we head into the autumn," commented Michael Hewson, market analyst at CMC Markets.
"For now, markets are buying the transitory narrative, however if the current trend continues, 'transitory' will be doing a lot more heavy-lifting than it is doing now," he added.
ThinkMarkets analyst Fawad Razaqzada noted that the latest numbers represented "the fourth consecutive month of above-forecast inflation on both the headline and core fronts.
After easing lower on Monday, they gained ground again Tuesday on news that demand had surged in June as rising vaccination rates helped underpin robust economic activity, and could continue to strengthen this month, according to the International Energy Agency.
Headline numbers for JPMorgan looked good, but on closer scrutiny specialists were less than impressed with the results from some basic operations.
"The bar was set too high for JPMorgan and today's results don't paint a good picture for the rest of the banks," remarked Edward Moya, an analyst at OANDA.
- Key figures around 1615 GMT - New York - DOW: DOWN 0.1 percent at 34,965.82 points EURO STOXX 50: FLAT at 4,094.56 London - FTSE 100: FLAT at 7,124.72 (close) Frankfurt - DAX 30: FLAT at 15,789.64 (close) Paris - CAC 40: FLAT at 6,558.47 (close) Tokyo - Nikkei 225: UP 0.5 percent at 28,718.24 (close) Hong Kong - Hang Seng Index: UP 1.6 percent at 27,963.41 (close) Shanghai - Composite: UP 0.5 percent at 3,566.52 (close) Euro/dollar: DOWN at $1.1811 from $1.1864 at 2100 GMT Pound/dollar: DOWN at $1.3850 from $1.3886 Euro/pound: UP at 85.27 from 85.42 pence Dollar/yen: UP at 110.39 from 110.35 yenBrent North Sea crude: UP 1.4 percent at $76.23 per barrelWest Texas Intermediate: UP 1.3 percent at $75.06 per barrel