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Investors will focus on inflation data on Tuesday against a backdrop of the Federal Reserve as it considers the end of its Covid-19 pandemic-era programs.
Daniel Slim / AFP via Getty Images
He
Dow Jones industrial average
fell on Tuesday as global equities mixed, following the release of key U.S. inflation data.
Just before noon, the Dow fell 181 points, or 0.5% after the index rose 261 points on Monday, investing five consecutive days of losses. He
S&P 500
fell 0.2%, while the
Nasdaq Composite
increased by 0.2%. All three indices had been higher in the open market. The S&P 500 is about to close below its opening level for the sixth consecutive trading session. This last happened in the 6 days that ended on February 27, 2020.
Consumer prices rose 0.3% month-on-month in August, while the core CPI rose 0.1%. Expectations were for the CPI to rise by 0.4% in August, from 0.5% in July. Compared to the same period last year, inflation rose 5.3% as companies raise prices to cover higher costs.
One of the main drivers of Monday’s sale was that the reading of lower-than-expected inflation masked a highly inflationary outlook. The result was not only slightly below expectations, but air fares and hotel prices fell 9.1% and 3.3% month-on-month, respectively. This is due, in part, to Covid-19 infections spreading rapidly this summer, indicating that these prices may strengthen in the coming months, wrote Andrew Hollenshorst, an economist at Citigroup.
“We continue to see signs that inflationary pressure will be more persistent than Fed officials or markets expect,” Hollenhorst said.
“Nobody really believes the CPI number, that we are out of the forest [on inflation]”, Added Rhys Williams, investment director of all the opportunistic capitalists of Spouting Rock Asset Management, which manages about $ 3 billion.
According to Instinet technical analysts, the S&P 500, which fell more than 1.6% from its historic success on September 2, could quickly fall another 0.1% in the short term.
Continued high inflation could force the Federal Reserve to raise interest rates earlier than currently forecast. In addition, higher corporate taxes — now formally proposed by House Democrats — could reduce earnings per share estimates.
The ten-year Treasury yield fell to 1.28% from 1.34%.
In commodity markets, oil prices rose as oil recovery continued. Brent international crude oil futures traded at around $ 74 a barrel, while futures for US benchmark West Texas Intermediate were close to $ 71 a barrel.
Abroad, the Chinese technology sector continued to be pressured by the reported planned breakdown of the main Alipay payments application by regulators, with
Shanghai Composite
they fall by 1.4% and those in Hong Kong
Hang Seng Index
falling 1.2%. The pan-European
Stoxx 600
it was little changed.
Here are 10 stocks moving on Tuesday:
Stocks of luxury goods such as
LVMH,
Burberry,
Sec,
i
Richemont
all were minor, as analysts noted concerns about the rise in Covid-19 cases in Asia. Consumers from China, Japan and other countries in the region are critical to the sales and growth of these companies. LVMH fell 1.4% in London, Burberry 1.8% in London, Kering 3.5% in Paris and Richemont 1.9% in London.
apple
(ticker: AAPL) shares were up 0.5% ahead of the launch event of the new iPhones.
Oracle
Shares (ORCL) fell 3.6% after reporting a profit of $ 1.03 per share, exceeding estimates of 97 cents per share, on sales of $ 9.73 billion, below expectations of $ 9,777. millions of dollars. De Barron Eric Savitz wrote that the company guided higher quarterly earnings per share than analysts had expected.
Herbalife Nutrition
Shares (HLF) fell 16.7% after the company said third-quarter and full-year sales and profits will be lower than initially expected. The company still expects 21% growth in sales during the same quarter in 2019 and reduced its full-year earnings per share guide to $ 4.75 from $ 4.90.
Boeing
(BA) shares fell 1.1% after the company said the aircraft and commercial services business was recovering from its pandemic disruptions.
CureVac NV
(CVAC) fell 4.9% after the company announced it was ending part of its Covid-19 vaccine manufacturing process.
Coinbase
(COIN) was 1.1% higher. Shares fell more than 2% on Monday after announcing a $ 1.5 billion bond sale.
Write to Jacob Sonenshine at [email protected]