Stocks, Futures Fall as China Fans Inflation Worry: Markets Wrap

(Bloomberg) -- Stocks and equity futures fell Wednesday as Chinese data fueled concerns about inflationary pressures in the global economy. Treasury yields climbed ahead of a report on U.S. consumer prices.

MSCI Inc.’s Asia-Pacific share gauge declined and China’s market struggled after a report showed factory-gate prices grew at the fastest pace in 26 years. Retail inflation also topped estimates. China’s property sector continues to damp sentiment: developer Fantasia Holdings Group Co. plunged and indebted China Evergrande Group faces a payment test on dollar bonds.

U.S. and European futures retreated after the S&P 500 dropped for the first time in nine sessions, hurt by financial shares. The Nasdaq 100 skidded on Tesla Inc.’s loss of $199 billion in value amid a range of negative headlines.

Longer maturity U.S. Treasuries pared a climb and the dollar ticked up. Yields on U.S. Treasury Inflation-Protected Securities were near record lows.

Traders are awaiting Wednesday’s U.S. consumer-price inflation data, which may deliver the highest print since December 1990. Persistent price pressures that accelerate monetary-policy tightening are among the key risks for global stocks, which remain near all-time highs.

San Francisco Fed President Mary Daly indicated she expected “eye-popping” inflation to subside next year as pandemic-related supply-chain snarls abate. St. Louis Fed President James Bullard noted corporate pricing power and reiterated he’s penciled in two rate hikes in 2022.

“Because we haven’t seen inflation for a while, people aren’t used to it,” Drew Matus, chief market strategist at MetLife Investment Management, said on Bloomberg Television. “What we should expect over the next half a year is -- as people become more understanding of what the Fed might do -- we are going to see more volatility.”

Oil was steady, while iron ore tumbled on dimming prospects for steel demand owing to China’s real-estate troubles. 

In cryptocurrencies, Bitcoin was trading below $67,000. 
Coinbase Global Inc. shares fell 13% in extended trading after the biggest U.S. digital-asset exchange reported worse-than-forecast results.

What to watch this week:

• China’s Communist Party’s decision-making Central Committee meets through Thursday
• U.S. wholesale inventories, CPI, initial jobless claims Wednesday
• U.S. bond marked is closed in observance of Veterans Day Thursday
• China holds its annual Singles’ Day, the world’s biggest shopping festival, when e-commerce giants like Alibaba and JD.com Inc. lure buyers with bargains Thursday

For more market analysis, read our MLIV blog.

Stocks

• S&P 500 futures fell 0.3% as of 6:15 a.m. in London. The S&P 500 fell 0.4%
• Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 0.7%
• Japan’s Topix index dropped 0.5%
• Australia’s S&P/ASX 200 Index dipped 0.1%
• South Korea’s Kospi index fell 1.1%
• Hong Kong’s Hang Seng Index fell 1%
• China’s Shanghai Composite Index dropped 0.8%
• Euro Stoxx 50 futures fell 0.2%

Currencies

• The Japanese yen was at 112.89 per dollar
• The offshore yuan was at 6.3923 per dollar
• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.1579

Bonds

• The yield on 10-year Treasuries rose two basis points to 1.46%
• Australia’s 10-year bond yield fell about five basis points to 1.73%

Commodities

• West Texas Intermediate crude rose 0.2% to $84.35 a barrel
• Gold was at $1,825.42 an ounce, down 0.4%

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