Connect with us

Hi, what are you looking for?

The Smart Citizen Report


S&P 500 Climbs as Tech Flexes Muscles, but Inflation Jitters Stifle Upside

Stock Markets3 hours ago (Oct 13, 2021 04:54PM ET)

(C) Reuters.

By Yasin Ebrahim – The S&P 500 closed higher Wednesday, led by strength in tech amid worries that persistently elevated inflation could dent the recovery just as the Fed’s September minutes signaled the taper of bond purchases could get underway as soon as next month.

The S&P 500 rose 0.3%, the Dow Jones Industrial Average was flat, the Nasdaq Composite was up 0.73%.

“Participants noted that if a decision to begin tapering purchases occurred at the next meeting, the process of tapering could commence with the monthly purchase calendars beginning in either mid-November or mid-December,” the Fed minutes showed.

The minutes arrived after Labor Department reported that consumer prices in September rose more than expected.

The consumer price index rose 0.4% last month, above the 0.3% rise in August, and more than estimates of 0.3%. The uptick in consumer prices in September lifted the year-on-year increase in the CPI to 5.4% from 5.3% in August.

Signs that price pressures are beginning to emerge in sticker areas of the economy such as rents and owners’ equivalent rents will test the Federal Reserve’s ongoing narrative that inflation remains transitory.

“[P]rice pressures are shifting to the stickier components and will make the Fed’s ‘transitory’ thesis more difficult to defend,” Jefferies (NYSE:JEF) said in a note.

The 10-year inflation breakevens — a key measure of inflation expectations over the next decade – climbed to 2.53%, the highest since May 2018. A further increase in the pace of the inflation could flip the relationship between bonds and stocks, and pressure the overall market lower.

“Once [10-year breakevens] go above two and a half percent, stocks and bonds tend to move in the same direction,” Christoph Schon, Senior Principal, Applied Research at Qontigo, told in an interview on Wednesday. “If we were to see a further increase in breakeven inflation rates, then we could see an simultaneous sell off of the stock and bond market continue.”

Financials were the biggest drag on the broader market, paced by a decline the banking stocks as JPMorgan got the third-quarter earnings season underway.

JPMorgan Chase (NYSE:JPM) reported Q3 earnings of $3.74 per share on revenue of $29.65 billion, compared with estimates of $2.92 on revenue $29.65 billion. Its shares fell more than 2%.

BlackRock (NYSE:BLK) also delivered a beat on both the top and bottom lines, sending its shares more than 3% higher.

Delta Air Lines (NYSE:DAL) swung to a profit in the third quarter, but the airline warned that higher fuel costs will hurt fourth-quarter results. It’s shares fell nearly 6%.

Energy cut some losses as oil prices recovered from session lows on expectations that demand will continue to strengthen.

Russian President Vladimir Putin said it was “quite possible,” that oil prices could top $100 per barrel.

Megacap tech was supported by fall in Treasury yields, but gains in the overall sector were kept in check by weakness in Apple.

Apple (NASDAQ:AAPL) fell about 0.5% after Bloomberg reporting, citing unnamed sources, that the tech giant it likely to cut iPhone 13 production by as many as 10 million units amid the ongoing global chip shortage.

Google-parent Alphabet (NASDAQ:GOOGL), Facebook (NASDAQ:FB), and Amazon (NASDAQ:AMZN) were above the flatline.

S&P 500 Climbs as Tech Flexes Muscles, but Inflation Jitters Stifle Upside

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Join Our Time-Limited Free Subscription! Get Latest Trading Ideas, Business Info and Market Stocks.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

You May Also Like

Editor's Pick

 Going Full Liberal In response to the arrest of a man who walked into a cafe holding a baseball bat and screaming through a megaphone, a...


Cryptocurrency1 hour ago (Mar 15, 2021 05:00AM ET) XRP Price Prediction if It Wins Lawsuit 2020 was a striking year for cryptocurrencies as it...


World50 minutes ago (Jul 23, 2021 08:52AM ET) (C) Reuters. FILE PHOTO: A medical worker prepares a syringe at a coronavirus disease (COVID-19) vaccination...

Editor's Pick

Going Full Liberal More trouble for creepy Joe. An extensive new survey by Morning Consult of nearly 28,000 registered voters presents some troubling numbers for the...

Editor's Pick

Going Full Liberal National Public Radio (NPR) posted a tweet Saturday urging every reader to begin “decolonizing your bookshelf.” According to NPR, “white voices...

Editor's Pick

Going Full Liberal The liberal plan?  Get the body count as high as possible to hurt Trump.  These people are disgusting. Last week, the...

Editor's Pick

Going Full Liberal Liberal brilliance on full display. New York City appears to have experienced a surge in shootings this week after the New...

Editor's Pick

Going Full Liberal In the past few weeks, demonstrators — mobs, really — have destroyed or defaced the following statues across the United States....

Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.

The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

© Copyright 2021, All Rights Reserved