Wall Street extends gains amid cooling PPI, Chinese techs jump on earnings beat
Macro Scenes:
The US stock markets extended gains amid further encouraging inflation data. The US October Producer Price Index (PPI) declined 0.5% month on month, the deepest drop since April 2020. However, the retail sales data came to be slightly stronger than expected. The diverging indicator may point to the “soft-landing” scenario for the US economy. The US government shutdown risk receded as the House of Representatives passed a bill to fund the government until 18 January. The bill is sent to the Senate, which is expected to pass. The US Treasury yields moved higher after a sharp decline on Wednesday as positive retail data took “higher for longer rates” fears back on the table. The US dollar rebounded after Wednesday’s biggest one-day slump in more than one year. This pressed on the Eurodollar and the British Pound as the UK October CPI fell more than expected, down 4.6% year on year, the lowest in two years. Gold extended the second-straight day gains due to slumped bond yields and weakened USD. Spot gold rose above the key resistance of 1,945 again. Crude oil prices accelerated decline after the US reported higher-than-expected inventory data. The US crude production ramped up to a record of 13.2 million barrels per day. Chinese stock markets are set to open higher, buoyed by better-than-expected Chinese economic data and major Chinese tech companies’ positive earnings reports. The Hang Seng Index futures rose 1%. The ASX 200 futures were up 0.05%, pointing to a higher open following Wall Street’s rally.Chart of the Day:
JD.com (NDX: JD ADR), daily
Source: CMC Markets as of 16 November 2023