Global markets fall after data show US inflation cooling

File Photo: The New York Stock Exchange (NYSE) floor will be displayed on March 18, 2020, after closing in New York, USA.Reuters / Lucas Jackson

September 15, 2021

Elizabeth Diltz Marshall

New York (Reuters) – New on Tuesday when data show that US inflation is chilling, global stock markets and US Treasury yields are declining, and the US central bank begins to taper its asset purchases Question arose.

MSCI’s global equity benchmark fell 0.33%, with all 11 major sectors of the S & P 500 falling sessions, with energy and finance falling the most.

European stocks closed 0.1% lower and were dragged into mining, banking and luxury stocks, with Asian luxury stocks following a new surge in COVID-19 cases in Fujian, China.

Benchmark 10-year bond yields fell more than 6 basis points that day to a low of 1.263%, the lowest since August 24th.

According to the US Ministry of Labor, the consumer price index (CPI) rose only 0.1% last month, compared to the expected 0.3% rise. This is the smallest rise in six months, indicating that inflation has probably peaked. This is in line with Federal Reserve Chairman Jerome Powell’s long-standing belief that high inflation is temporary, but economists and market watchers have a continuous supply that can last for months. We continue to be concerned about constraints and labor costs.

David Petrosinelli, Senior Trader at InspereX, said:

“These trends indicate that labor costs will continue to rise, and inflation could become more tenacious in the long run.”

The Federal Reserve Board will meet next week. August CPI data lifts some of the pressure the Fed has faced to announce that it will begin shrinking its large-scale bond purchase program.

BlackRock’s chief investment officer for global fixed income, Rick Rieder, said further delaying this important Fed announcement would “distort” the economy and disrupt the market.

The leader, who is also responsible for BlackRock’s global allocation team, said:

The Dow Jones Industrial Average fell 292.06 points (0.84%), the S & P 500 fell 25.68 points (0.57%), and the Nasdaq Composite fell 67.82 points (0.45%).

The prospect of raising corporate tax from 21% to 26.5% in the United States as part of the $ 3.5 trillion budget is also at the forefront and central to investors.

Investment bank Goldman Sachs Group, Inc. estimates that if the Democratic Party raises its corporate tax rate to 25% and gets half of the proposed increase in foreign income tax rates, it could reduce S & P 500 earnings by 5% in 2022. I am. In Asia, the tech company’s grip once again kept investors on the edge after Chinese tightening authorities told tech giants to stop blocking each other’s links on their site. MSCI’s widest non-Japanese Asia Pacific stock index fell 0.43%. The dollar index fell 0.03 points (0.03%) to 92.645. The euro was flat against the dollar at $ 1.1807.

Tropical Storm Nicholas caused heavy rains and power outages in Texas, but oil prices remained almost unchanged as Hurricane Aida caused less damage to US energy infrastructure than it did earlier this month. [O/R]

Brent crude rose 90 cents (0.1%) at $ 73.60 a barrel. US crude closed at $ 70.46 a barrel, up 10 cents. Spot gold prices rose $ 12.7509 (0.7%) per ounce to $ 1,806.24. [GOL/]

(Report by Elizabeth Diltz Marshall of New York, edited by Tom Arnold of London and Scott Murdoch of Hong Kong, Margherita Choi and Nick Zieminsky)

Global markets fall after data show US inflation cooling

Source link Global markets fall after data show US inflation cooling

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