Stocks Fall as China Data Highlight Inflation Risk: Markets Wrap – Yahoo Finance

(Bloomberg) — Most Asian stocks slipped Wednesday as the latest Chinese data highlighted the inflationary pressures building up in the global economy. Treasury yields climbed ahead of a report on U.S. consumer prices.

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Shares fluctuated in Japan and dipped in Hong Kong and China, where factory-gate prices grew at the fastest pace in 26 years and consumer-price inflation topped estimates. Developer Fantasia Holdings Group Co. plunged after resuming trading amid the continuing troubles in China’s property sector.

U.S. futures retreated after the S&P 500 declined for the first time in nine sessions, hurt by financial shares. The Nasdaq 100 underperformed, in part on Tesla Inc.’s loss of $199 billion in value on a host of negative news.

Longer maturity Treasuries pared a climb, which earlier saw the 30-year yield reach the lowest since July. Bonds were supported by an unwinding of bearish bets and speculation about a possible dovish shift in the leadership of the Federal Reserve. The dollar ticked up.

Persistent price pressures that accelerate monetary-policy tightening are among the key risks for global stocks, which remain near record levels.

San Francisco Fed President Mary Daly indicated she expected “eye-popping” inflation to subside next year as pandemic-related supply-chain snarls abate. St. Louis Fed President James Bullard noted corporate pricing power and reiterated he’s penciled in two rate hikes in 2022.

“Because we haven’t seen inflation for a while, people aren’t used to it,” Drew Matus, chief market strategist at MetLife Investment Management, said on Bloomberg Television. “What we should expect over the next half a year is — as people become more understanding of what the Fed might do — we are going to see more volatility.”

U.S. producer-price inflation is running at an annual pace close to 9%, and traders are awaiting Wednesday’s consumer-price report.

Meanwhile, China Evergrande Group is facing its biggest payment test since signs of a liquidity crisis emerged at the firm five months ago. Investors are waiting to see if the embattled developer makes coupon payments totaling $148.1 million for three dollar bonds before the end of 30-day grace periods Wednesday.

Oil extended an advance toward $85 a barrel on speculation that the Biden administration may pull the plug on any plans to release crude from the nation’s emergency reserves after a U.S. energy report showed supplies rising next year.

In cryptocurrencies, Bitcoin was trading around $67,000, not far from the record high it scaled on Tuesday.

What to watch this week:

  • China’s Communist Party’s decision-making Central Committee meets through Thursday

  • U.S. wholesale inventories, CPI, initial jobless claims Wednesday

  • U.S. bond marked is closed in observance of Veterans Day Thursday

  • China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday

For more market analysis, read our MLIV blog.

Stocks

  • S&P 500 futures fell 0.3% as of 10:47 a.m. in Tokyo. The S&P 500 fell 0.4%

  • Nasdaq 100 futures fell 0.3%. The Nasdaq 100 fell 0.7%

  • Japan’s Topix index dropped 0.1%

  • Australia’s S&P/ASX 200 Index rose 0.1%

  • South Korea’s Kospi index fell 0.8%

  • Hong Kong’s Hang Seng Index fell 0.5%

  • China’s Shanghai Composite Index dropped 0.7%

Currencies

  • The Japanese yen was at 112.88 per dollar

  • The offshore yuan was at 6.3917 per dollar

  • The Bloomberg Dollar Spot Index rose 0.1%

  • The euro was little changed at $1.1590

Bonds

  • The yield on 10-year Treasuries rose about three basis points to 1.47%

  • Australia’s 10-year bond yield fell four basis points to 1.74%

Commodities

  • West Texas Intermediate crude rose 0.6% to $84.64 a barrel

  • Gold was at $1,828.68 an ounce, down 0.2%

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