U.S. equity futures edged lower Wednesday, while global stocks hovered near all-time highs, as investors braced for a key reading on domestic inflation that could have ripple effect for central bank policy makers around the world.
Headline inflation, in fact, surged to an annualized rate of of 6.2% last month, the fastest since 1990, as energy price increases and supply chain disruptions continued to filter through into consumer price pressures.
Stocks snapped their record winning streak of eight consecutive all-time highs yesterday amid a modest retreat from risk markets fueled by a faster-than-expected reading for producer price inflation and a slump in investor demand for the Treasury’s $39 billion 10-year note auction.
Overnight data from China showing factory gate inflation surging 13.5% from last year, to the fastest pace in nearly three decades, only added to concerns that supply chain disruptions, record high energy prices and loose central bank policies will stoke consumer price pressures well into next year.
Late last month, the Fed preferred measure of U.S. inflation showed few signs of easing in September, with core consumer prices remaining stubbornly close to their highest levels in three decades, putting a damper on overall spending. Last week’s stronger-than-expected jobs report, too, showed average hourly earnings rising at an annual 4.9% clip.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 75 point opening dip while those linked to the S&P 500 are priced for an 17 point move to the downside.
Futures tied to the tech-focused Nasdaq Composite are indicating a 110 point pullback crept higher, to 1.483% following both the headline CPI reading and the China PPI reading earlier in the session.
Apart from today’s inflation reading, investors will also be tracking the debut of shares in electric carmaker Rivian, which priced its $12 billion IPO at $78 per share last night as the Amazon backed (AMZN) – Get Amazon.com, Inc. Report group for a $76 billion market value in its nascent challenge to Tesla (TSLA) – Get Tesla Inc Report.
Tesla shares, in fact, look set for a third consecutive session of declines despite a price target boost from Bank of America that could provide some support for a stock that has shed $200 billion in market value over the past two days.
Bank of America analyst John Murphy lifted his price target on the clean-energy carmaker by $200, to $1,200 per share, following a two-day slump triggered in part by founder and CEO Elon Musk’s suggestion that he could sell as much as 10% of his stake in the group.
Other stocks on the move include Poshmark (POSH) – Get Poshmark Report, which plunged more than 30% after the online resale platform posted a wider-than-expected third quarter loss and warned the recent privacy changes from Apple (AAPL) – Get Apple Inc. (AAPL) Report would trigger higher marketing spend.
In overseas markets, Europe’s Stoxx 600 edged 0.13% lower by mid-day trading in Frankfurt with investors tracking today’s CPI release, while Asia’s MSCI ex-Japan benchmark ended the session 0.09% higher at 648.49 points. The Nikkei 225 closed 0.61% lower in Tokyo at 29,106.78 points.