Stocks, Bonds Gain Ahead of Key US Inflation Print: Markets Wrap

By Pune Media On Jan 15, 2025 22

(Bloomberg) — Wall Street futures edged higher and Treasury yields slipped ahead of crucial inflation data that many investors hope will surprise to the downside, following benign readings in Britain and Tuesday’s lower-than-expected US wholesale price print.

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Contracts on the Nasdaq 100 and the S&P 500 rose by about 0.2%, with BlackRock Inc. shares gaining in premarket trading after the investment firm reported estimate-beating earnings and assets under management that met expectations. Results are due from big banks, including Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., which should offer clues on the health of the US economy and corporate sector.

While the upcoming inflation data is keeping traders wary of making big bets, Treasury 10-year yields edged lower and Bloomberg’s dollar gauge extended Tuesday’s 0.4% drop.

The inflation report comes at a crucial time for world markets pressured by a pullback in expectations of rate-cuts from the Federal Reserve and other central banks. Forecasters expect CPI to show a fifth month of increases, with so-called core CPI up 0.3% in December.

“We need to see a more welcome print on the inflation front today,” said Laura Cooper, global investment strategist at Nuveen. “Today’s print will be crucial for the near-term price action as it could trigger another leg in the rate selloff, if we see a hotter-than-expected print.”

Equity traders are braced for a volatile day, with options implying moves of 1% in either direction for the S&P 500. Market jitters also center around Treasuries, with 10-year yields not far off the psychologically key 5% level and 30-year rates hitting new highs above 5% on Tuesday.

A yield at 5% “poses a risk to the continuation of the stock market rally,” said Vincent Juvyns, global market strategist at JPMorgan Asset Management. “It’s clear that at that level it becomes a serious competitor in terms of performance to the stock market.”

Meanwhile, investors in Europe were heartened by data showing UK consumer prices rose less than forecast in December, keeping alive hopes of a Bank of England interest-rate cut next month. The print sent the pound lower, while 10-year gilt yields slid nine basis points, bringing relief to a market that’s borne the brunt of the recent bond selloff.

Europe’s Stoxx 600 index rose 0.6% while London’s FTSE 350 rallied 1.5%.

Key events this week:

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Citigroup, JPMorgan, Goldman Sachs and Wells Fargo earnings, Wednesday
US CPI, Empire manufacturing, Wednesday
Fed’s John Williams, Tom Barkin, Austan Goolsbee and Neel Kashkari speak, Wednesday
TSMC earnings, Thursday
ECB releases account of December policy meeting, Thursday
Bank of America, Morgan Stanley earnings, Thursday
US initial jobless claims, retail sales, import prices, Thursday
China GDP, property prices, retail sales, industrial production, Friday
Eurozone CPI, Friday
US housing starts, industrial production, Friday

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 6:33 a.m. New York time
Nasdaq 100 futures rose 0.3%
Futures on the Dow Jones Industrial Average rose 0.3%
The Stoxx Europe 600 rose 0.7%
The MSCI World Index rose 0.2%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%
The euro was little changed at $1.0307
The British pound rose 0.1% to $1.2229
The Japanese yen rose 0.7% to 156.89 per dollar

Cryptocurrencies

Bitcoin rose 0.1% to $96,551.39
Ether fell 0.8% to $3,188.18

Bonds

The yield on 10-year Treasuries declined two basis points to 4.77%
Germany’s 10-year yield declined two basis points to 2.63%
Britain’s 10-year yield declined nine basis points to 4.80%

Commodities

West Texas Intermediate crude was little changed
Spot gold rose 0.3% to $2,686.73 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu and Julien Ponthus.