US stocks close higher as PPI comes in higher than expected

Stocks ticked higher Wednesday as traders awaited the release of new US consumer inflation numbers and Treasury yields continued to retreat.

The producer price index rose 0.5 per cent for September, coming out higher than the Dow Jones estimate for a 0.3 per cent rise. The figure still represented a slowing from the 0.7 per cent producer prices increase in the prior month.

The consumer price index report for September is slated for release Thursday. Economists surveyed by Dow Jones expect an increase of 0.3 per cent from the previous month and 3.6 per cent year over year. Investors will keep a close eye on the data as they search for clues on future Federal Reserve policy moves.

The majority of Fed officials indicated at their September meeting that one more hike would be likely, minutes released Wednesday showed.

The yield on the 10-year Treasury note declined more than 9 basis points on Wednesday, but hit a 16-year high earlier this month. Since the September Fed meeting, policymakers have indicated that higher yields could negate the need for future hikes.

To be sure, despite the economy being more resilient than expected, investors noted that inflation will continue to remain sticky.

The Dow Jones Industrial Average was higher by 0.19 per cent, or 65.57 points, to close at 33,804.87. The S&P 500 gained 0.43 per cent, ending at 4,376.95. The tech-heavy Nasdaq Composite added 0.71 per cent, landing at 13,659.68.

Birkenstock opened 11 per cent below its initial public offering price in its US debut.

Earlier Wednesday, Exxon Mobil agreed to buy shale driller Pioneer Natural Resources in an all-stock transaction worth $59.5 billion, its largest buyout since acquiring Mobil two decades ago, creating a colossal fracking operator in West Texas. Pioneer shares were up 1.4 per cent, while Exxon was down by about 3.6 per cent.

In addition, Albemarle must admit their formal takeover offer for Liontown Resources today. Albemarle need a 75 per cent of shareholders to agree on the decision to admit the takeover. However, Gina Rinehart's recent spending spree into Liontown, now sitting at an ownership of 19.9 per cent, means that this decision will likely get vetoed.

Investors continue to assess the ongoing war unfolding between Israel and Hamas after the militant group launched an attack on Israeli civilians in what marked the deadliest offensive the country’s experienced in 50 years. President Joe Biden condemned the Hamas attacks as terrorism in remarks Tuesday and said that the United States stands with Israel.

Overall, US sectors closed mostly higher overnight. Real Estate was the best performer, whilst Energy was the worst.

Futures

The SPI futures are pointing to a 0.1 per cent gain.

Currency

One Australian dollar at 7:30 AM was buying 64.14 US cents.

Commodities

Gold added 0.65 per cent. Silver gained 1.17 per cent. Copper lost 0.61 per cent. Oil fell 2.64 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.11 per cent, Frankfurt gained 0.24 per cent, and Paris closed 0.44 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.60 per cent, Hong Kong’s Hang Seng gained 1.29 per cent while China’s Shanghai Composite closed 0.12 per cent higher.

The Australian share market closed 0.68 per cent higher at 7,088.41.

Ex-dividends

Duxton Water Ltd (ASX:D2O) is paying 3.5 cents fully franked
Future Gen Aust (ASX:FGX) is paying 3.35 cents fully franked
Gowing Bros (ASX:GOW) is paying 3 cents fully franked
WAM Global (ASX:WGB) is paying 5.75 cents fully franked

Dividends payable

Brambles Ltd (ASX:BXB)
Eureka Group Holdings Ltd (ASX:EGH)
FFI Holdings Ltd (ASX:FFI)
Imdex Ltd (ASX:IMD)
IVE Group Ltd (ASX:IGL)
Northern Star Resources Ltd (ASX:NST)
Pacific Current Group Ltd (ASX:PAC)
Pepper Money Ltd (ASX:PPM)
Perseus Mining Ltd (ASX:PRU)
Ramelius Resources Ltd (ASX:RMS)
South32 Ltd (ASX:S32)
Vulcan Steel Ltd (ASX:VSL)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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