Stocks Bounce With Futures Before Inflation Data: Markets Wrap

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(Bloomberg) — U.S. equity futures bounced before inflation data that along with earnings reports will give key insights into corporate health in an era of rising costs.

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Both S&P 500 and Nasdaq 100 contracts rose ahead of the U.S. consumer report, with the tech-heavy Nasdaq outperforming. News that the chip shortage may crimp Apple Inc.’s output weighed on sentiment.

The U.S. 10-year Treasury yield held below 1.60% and a gauge of the dollar ticked lower. A rally in oil paused but crude remained around $80 a barrel amid a global energy crunch. Chinese thermal coal futures hit another record high.

Apple fell in the premarket on a likely cut in iPhone 13 production targets for 2021 due to chip shortages, putting the focus on pandemic-related supply-chain snarls as earnings season kicks off.

The upcoming flurry of corporate earnings releases will offer insight into whether businesses expect price pressures to hurt profits at a time when economic growth is slowing and central banks begin to pare back pandemic stimulus.

JPMorgan Chase & Co. and BlackRock are among companies reporting earnings Wednesday.

“We think earnings forecasts have room to rise, helping the market, whilst valuations have already fallen a long way,” according to Ben Laidler, global markets strategist at investment platform eToro.

Read: Strategists Look Past Third-Quarter Earnings to Home In on 2022

In cryptocurrencies, Bitcoin pared its recent rally and traded around $55,000.

European equities added about 0.5%, as news that German software giant SAP increased its revenue forecast led tech stocks higher.

Most Asian stock markets rose, but regional gains were capped by a small move lower in Japan and the cancellation of trading in Hong Kong due to typhoon Kompasu.

Here are a few events to watch this week:

  • U.S. FOMC minutes and CPI Wednesday

  • China PPI, CPI Thursday

  • U.S. initial jobless claims, PPI Thursday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

  • Futures on the S&P 500 rose 0.2% as of 6:35 a.m. New York time

  • Futures on the Nasdaq 100 rose 0.5%

  • Futures on the Dow Jones Industrial Average were little changed

  • The Stoxx Europe 600 rose 0.5%

  • The MSCI World index rose 0.1%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro rose 0.3% to $1.1564

  • The British pound rose 0.4% to $1.3636

  • The Japanese yen was little changed at 113.55 per dollar

Bonds

  • The yield on 10-year Treasuries declined one basis point to 1.56%

  • Germany’s 10-year yield declined four basis points to -0.13%

  • Britain’s 10-year yield declined four basis points to 1.10%

Commodities

  • West Texas Intermediate crude fell 0.8% to $80.03 a barrel

  • Gold futures rose 0.6% to $1,770.60 an ounce

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