Stock Market Today: Inflation Data, Fed Minutes Not Moving Much

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Investors annoyed by a news drought earlier this week saw their prayers answered on Wednesday with a mess of headlines – but none of it really gave the market a big boost.

Today’s headline was the September CPI reading, which showed consumer prices 5.4% year-on-year, slightly higher than the expected 5.3%.

“Some of the transient components are already moderating, such as airlines, clothing and used cars. Disruptions due to supply chains not being able to keep up with increased demand may take longer but will eventually be corrected, ”said Anu Gaggar, global investment strategist for Commonwealth Financial Network . “However, higher rents and wages could prove to be stickier and eat into corporate margins.”

BofA Global Research also cautions against non-transient risks. “Although a month does not create a trend, this is an early signal of the materialization of stronger persistent inflationary pressures, ultimately supporting continued inflation above the medium-term target,” said a team of economists from BofA.

Later Wednesday, the minutes of the Federal Reserve’s September 21-22 meeting showed it may begin a “phase-out process” starting as early as mid-November and ending in mid-2022.

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“In our opinion, the bar for moving forward with the phase-out of asset purchases is very low for the Fed, and in terms of the likely composition of the reduction, there appears to be considerable agreement,” said Bob Miller, Head of Fundamental Fixed Income Americas at BlackRock. . “Indeed, we already had the impression in July that the reduction in Treasury securities and MBS would occur at the same time, and assuming a decreasing timeframe from November to June 2022, that would imply a reduction of 15 billion dollars in the purchasing pace per month, or a faster adjustment schedule meeting by meeting.

The Dow Jones Industrial Average suffered a marginal loss to 34,377. S&P 500 far better, up 0.3% to 4,363, while the Nasdaq Composite closed 0.7% higher at 14,571.

Financials (-0.6%) were the worst sector on Wednesday. The performance of the Dow Jones was hampered by the drop in components American Express (AXP, -3.5%), Visa (V, -0.7%) and JPMorgan Chase (JPM, -2.6%) – the latter of which fell despite the news of revenue and earnings beating the streets to kick off the third-quarter earnings season.

“JPM’s pullback today amid a fairly positive earnings report does not suggest optimism for banks posting for the rest of the week,” said David Keller, chief market strategist at StockCharts.com .

Speaking on the charts, Keller adds: “After peaking at just above $ 170, the stock has again turned below $ 165, completing a ‘failed breakout’ pattern that implies a lack of confidence. investors. I would expect additional support and padding for stocks like JPM before any further upside is likely. “

Other stock market news today:

  • Small cap Russel 2000 climbed 0.3% to 2,241.
  • Black rock (BLK, + 3.8%) equities enjoyed a post-earnings rally today. In the third quarter, the world’s largest asset manager – with $ 9.46 trillion in assets under management – reported earnings of $ 10.95 per share on $ 5 billion in revenue. Analysts on average expected earnings per share of $ 9.35 on revenue of $ 4.9 billion. CFRA analyst Catherine Seifert retained her strong buy rating on BlackRock: “Despite difficult year-over-year comparisons, we consider BLK to be the best asset manager in its class with growth metrics and higher profitability than those of its peers defined to support the above actions. – peer review, ”she said.
  • Delta Airlines (DAL, -5.8%) was also the center of attention after profits. While the airline reported higher-than-expected adjusted earnings of 30 cents per share on $ 9.15 billion in revenue, its results were still below 2019 levels. DAL also warned that rising fuel costs could weigh on its results during the current quarter. Nonetheless, CFRA analyst Colin Scarola maintained his strong buy rating on Delta. “The current equity sell-off is hyper-focused on today’s challenges (high oil prices and limited business and international travel), but investors will be better served to think about a year from now, date to time. which we expect fuel prices to drop and almost all business / international recovery, ”he wrote in a note.
  • U.S. crude futures contracts lost 0.2% to close at $ 80.44 a barrel, ending a five-day winning streak.
  • Gold Futures gained 2% to $ 1,794.70 an ounce.
  • The CBOE Volatility Index (VIX) fell 6.8% to 18.50.
  • Bitcoin prices strengthened 3.6% to $ 57,272.90. (Bitcoin trades 24 hours a day; the prices listed here are at 4 p.m. each trading day.)
stock chart for 101321

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