Markets fly after CPI data: Crypto industry on the precipice

 

Stocks surged after October’s reading of consumer prices raised investor hopes that inflation has peaked. October’s consumer price index rose just 0.4 per cent for the month and 7.7 per cent from a year ago, its lowest annual increase since January and a slowdown from the 8.2 per cent annual pace in the prior month. Economists were expecting increases of 0.6 per cent and 7.9 per cent, according to Dow Jones. 

Treasury yields plunged after the CPI report, with the 10-year Treasury yield falling more than 18 basis points to 3.94 per cent as traders bet the Federal Reserve would slow its aggressive tightening campaign that’s weighed on markets all year.

The US Dollar, another recent pressure point for stocks, tumbled to its worst day since 2015 vs. a basket of other currencies.

The Dow Jones Industrial Average jumped 3.7 per cent, for its biggest one-day gain since stocks were emerging from the depths of the pandemic bear market in 2020. The S&P 500 jumped 5.5 per cent, in its biggest one-day rally since April 2020. The Nasdaq Composite surged 7.4 per cent, also its best since 2020.

With today’s CPI number coming down, the market is now betting pretty clearly that they think the interest rate rises are coming close to an end. The move in the S&P was the biggest daily move ever following a CPI data release. 

In crypto news it appears that Binance’s affair with FTX was just a one-night stand. After agreeing to take over FTX on Tuesday, Binance said it was walking away from the deal yesterday, leaving its collapsed rival exchange on the brink of extinction.

Facing a shortfall of up to $8 billion, FTX Chief Executive Sam Bankman-Fried (aka “SBF”) reportedly told investors that his firm needed a cash injection or it would go bankrupt. FTX’s meltdown could single-handedly wipe out whatever legitimacy the crypto industry had left.

And If you think you can make money being politically savvy, you might want to consider trading the SPAC linked to Donald Trump’s Truth Social platform. Shares in Digital World Acquisition Corp., the company planning to take Truth Social public, rose and fell with the former president’s political fortunes. On Monday, when Trump hinted he would announce another presidential bid soon, shares jumped 66 per cent, but yesterday after several candidates he backed lost their election, they dipped nearly 20 per cent.

Across the sectors, every sector rallied overnight with the interest-rate sensitive technology and real estate sectors the obvious highlights. Tech stocks that have been hardest hit by the rise in inflation and surging interest rates led the gains Thursday. Shares of Amazon were up 13 per cent. Apple, Meta and Microsoft were each up more than 6 per cent and Tesla jumped 5.3 per cent.

Semiconductor stocks got a boost too, with shares of Lam Research and Applied Materials each up more than 5 per cent. KLA also popped 3.7 per cent.

Shares of electric vehicle maker Rivian soared over 17.5 per cent after reaffirming its production goal of 25,000 vehicles for the full year. Rivian said it lost $1.74 billion in the third quarter, roughly the same as the second quarter.

Currencies

One Australian dollar at 8:20 AM has strengthened compared to the US dollar yesterday, buying 66.24 US cents (Thu: 64.27 US cents), 56.52 Pence Sterling, 93.22 Yen and 64.89 Euro cents.

Commodities

Iron ore is 1.6 per cent lower at US$88.15 tonne.

Iron ore futures are pointing to a 2.5 per cent gain.

Gold gained $46.80 or 2.7 per cent to US$1760.50 an ounce.

Silver added $0.47 or 2.2 per cent to US$21.80 an ounce.

Copper rose $8.50 or 2.3 per cent to US$378.50 a pound.

Oil gained $0.48 or 0.6 per cent to US$86.31 a barrel.

Futures

The SPI futures are pointing to a 2.7 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added almost 2 per cent, Frankfurt jumped 3.5 per cent and London’s FTSE closed 1.1 per cent higher.

In Asian markets, Tokyo’s Nikkei lost almost 1 per cent, Hong Kong’s Hang Seng fell 1.7 per cent and China’s Shanghai Composite closed 0.4 per cent lower..

Yesterday, the Australian sharemarket lost 0.5 per cent to close at 6964.

Dividends payable

CPT Global Ltd (ASX:CGO)
Charter Hall Long WALE REIT (ASX:CLW)
Newmark Property REIT (ASX:NPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network

Source: Finance News Network