Stocks fluctuated after a rally from oversold levels as traders awaited more clues on the outlook for Federal Reserve policy. Oil fell after an early-week surge.
(Bloomberg) — Stocks fluctuated after a rally from oversold levels as traders awaited more clues on the outlook for Federal Reserve policy. Oil fell after an early-week surge.
The S&P 500 was little changed as of 11:22 a.m. New York time. The yield on 10-year Treasuries declined seven basis points to 4.58%. The Bloomberg Dollar Spot Index was little changed.
The producer price index rose by more than forecast in September, bolstered by higher energy costs that continue to wrinkle the path toward sustainably lower inflation. Investors are now awaiting the September Fed meeting minutes later Wednesday as well as the consumer price index report out Thursday.
“Tomorrow’s CPI could paint a different picture, but today’s PPI suggests we haven’t seen the end of sticky inflation — and high interest rates,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office. “Either way, investors will need to remain patient. Lowering inflation significantly from last year’s highs was one challenge, getting it down to the Fed’s 2% target level is another.”
Fed Governor Christopher Waller said the US central bank can “watch and see” what happens before taking further action with interest rates as financial markets tighten. Meantime, Governor Michelle Bowman noted rates may need to rise further and stay higher for longer than previously expected. Yet her remarks sounded somewhat less hawkish than her comments on Oct. 2.
JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. will kick off the earnings season Friday, with the biggest US banks poised to write off more bad loans than they have since the early days of the pandemic as higher-for-longer interest rates and a potential economic downturn put borrowers in a bind.
Bank of America Corp. strategists predict US companies will deliver financial results that substantially beat analyst expectations, prompting a boost to their 2023 earnings estimate as a recovery gets underway this reporting season. The expectation is for a “sizable” beat, strategists including Ohsung Kwon and Savita Subramanian wrote.
Key events this week:
- Japan machinery orders, PPI, Thursday
- Bank of Japan’s Asahi Noguchi speaks, Thursday
- UK industrial production, Thursday
- US initial jobless claims, CPI, Thursday
- European Central Bank publishes account of September policy meeting, Thursday
- Fed’s Raphael Bostic speaks, Thursday
- China CPI, PPI, trade, Friday
- Eurozone industrial production, Friday
- US University of Michigan consumer sentiment, Friday
- Citigroup, JPMorgan, Wells Fargo, BlackRock results as the quarterly earnings season kicks off, Friday
- G20 finance ministers and central bankers meet as part of IMF gathering, Friday
- ECB President Christine Lagarde, IMF Managing Director Kristalina Georgieva speak on IMF panel, Friday
- Fed’s Patrick Harker speaks, Friday
Some of the main moves in markets:
- The S&P 500 was little changed as of 11:22 a.m. New York time
- The Nasdaq 100 rose 0.4%
- The Dow Jones Industrial Average fell 0.1%
- The Stoxx Europe 600 rose 0.1%
- The MSCI World index rose 0.2%
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0612
- The British pound was little changed at $1.2296
- The Japanese yen fell 0.3% to 149.16 per dollar
- Bitcoin fell 1.5% to $27,001.45
- Ether rose 0.2% to $1,563.64
- The yield on 10-year Treasuries declined seven basis points to 4.58%
- Germany’s 10-year yield declined five basis points to 2.73%
- Britain’s 10-year yield declined nine basis points to 4.34%
- West Texas Intermediate crude fell 3.2% to $83.23 a barrel
- Gold futures rose 0.5% to $1,884 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee.
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