Investors are cautious ahead of key US inflation data. Relations between the US and China are deteriorating again

By JustMarkets

At yesterday’s stock market close, the Dow Jones Index (US30) decreased by 0.54%, while the S&P 500 Index (US500) was down by 0.70%. The NASDAQ Technology Index (US100) closed negative by 1.17% on Wednesday. Shares of chip and semiconductor companies declined, dragging down the tech sector. Investors remain wary of making bullish bets on tech companies ahead of inflation data to be released today. The annualized inflation rate is expected to rise slightly from 3.0% to 3.3%, with core inflation (which excludes food and energy prices) falling from 4.8% to 4.7%. Core inflation and services inflation will be the main focus of economists.

The US expected inflation indicator, closely watched in the bond market, rose to a nine-year high, signaling that inflationary pressures could return with renewed vigor and the Federal Reserve may continue to combat the increased pressure by raising rates further.

Disney’s ESPN television channel struck a $2 billion deal with bookmaker PENN Entertainment to launch ESPN Bet, a sports betting company. PENN is up more than 7%. Walt Disney on Wednesday missed Wall Street expectations for quarterly revenue but said it was on track to cut costs by more than the $5.5 billion promised to investors in February. Shares fell about 1% in after-hours trading following the release of the results.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) increased by 0.49%, France’s CAC 40 (FR40) gained by 0.72% on Wednesday, Spain’s IBEX 35 (ES35) rose by 0.57%, and the UK’s FTSE 100 (UK100) closed up by 0.80%.

Over the past week, crude oil inventories rose by 5.851 million barrels after a historic drop of 17.049 million barrels last week. But disregarding the fundamental shift in US oil supply, oil traders are more encouraged by Saudi Arabia’s promised production cuts, bringing crude prices to their highest level in nine months.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.53%, China’s FTSE China A50 (CHA50) was down by 0.07%, Hong Kong’s Hang Seng (HK50) added 0.32% on the day, and Australia’s S&P/ASX 200 (AU200) was positive by 0.37% on Wednesday. Investor sentiment towards Chinese stocks deteriorated after US President Joe Biden signed an executive order outlining additional restrictions on US investment in China’s technology sector. On Wednesday, President Joe Biden signed an executive order banning some new US investments in China in sectors such as semiconductors and microelectronics, quantum information technology, and some artificial intelligence systems. The decree aims to prevent US capital and expertise from helping China develop technologies that could support its military modernization and undermine US national security. China said Thursday it was “seriously concerned” about the order and reserved the right to take action. China urged the US that it had no intention of alienating China or hindering its economic development.

S&P 500 (F)(US500) 4,467.71 −31.67 (−0.70%)

Dow Jones (US30) 35,123.36 −191.13 (−0.54%)

DAX (DE40)  15,852.58 +77.65 (+0.49%)

FTSE 100 (UK100) 7,587.30 +59.88 (+0.80%)

USD Index  102.51 -0.02 (-0.02%)

• – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
• – Norway Inflation Rate (m/m) at 09:00 (GMT+3);
• – US Consumer Price Index (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
• – FOMC Member Harker Speaks at 23:15 (GMT+3).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.