VOT Research Desk
Market Analytics and Considerations
Investors weighed weaker-than-expected producer price data and new geopolitical tensions amid unconfirmed allegations that Russian rockets had crossed into NATO-member Poland as three major US benchmark indices ended the regular session higher. December S&P 500 futures (ESZ22) are trending up +0.35% this morning. Gains in the Oil & Gas, Consumer Services, and Technology sectors fueled three major U.S. stock indexes.
Stifel stated in a note following the positive consumer prices report last week that the producer price index increased by 0.2% month-over-month in October, well below expectations of a rise of 0.4% month-over-month.
In the meantime, U.S. rate futures have priced in a 14.6% chance of a 75 basis point hike and an 85.4% chance of a 50 basis point rate increase at the monetary policy meeting in December.
The inflation estimate that came in a little bit lower than anticipated, according to Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, “has been driving the market.
00:02 01:34 Firefighters in Przewodow, a village in eastern Poland near the Ukrainian border, reported that an explosion killed two people as NATO allies investigated reports that the blast was caused by Russian missiles. Stocks retreated around midday as a result, and the Dow turned negative.
Reports of a Russian missile landing in Poland sparked the decline .Steve Sosnick, Interactive Brokers’ chief strategist, stated, “Markets are nervous, not panicked, right now. This could develop into something far worse.
Today, the U.S. Retail Sales data in a few hours is the focus of all attention. Retail Sales are expected to rise by +1.0% m/m in October, up from the previous value of -0.0% m/m, according to economists.
Additionally, investors are likely to focus on September’s U.S. Core Retail Sales data, which showed a m/m growth rate of +0.1%.The new figure, according to economists, should be +0.4% m/m.
Today, data on U.S. Industrial Production will be released.In comparison to the previous value of +0.4% m/m, economists anticipate that this number will rise to +0.2% m/m in October.
Additionally, data on U.S. crude oil inventories will be reported today. The United States 10-Year rate is currently at 3.794%, which is a decrease of -0.14% on the previous week’s value of +3.925M, according to economists’ estimates.
This morning, the Euro Stoxx 50 futures are up 0.13 percent. However, after a fatal missile strike on a village in Poland, a NATO member, political tensions in the region were raised, those gains are likely to be fragile. The attack that resulted in the deaths of two people in a village near the Ukrainian border will be the subject of a meeting of NATO ambassadors early on Wednesday. Consumer prices in the United Kingdom increased by 11.1% y/y in October, up from 10.1% y/y the month before and a 41-year high, according to the most recent inflation reading. This suggests that the Bank of England will increase interest rates again.
Today, the Core CPI, PPI Input, and Italy CPI data were made public.
U.K. October Center CPI has been accounted for at +6.5% y/y, more grounded than assumptions for +6.4% y/y.
In October, the United Kingdom’s PPI Input exceeded expectations by 0.6% m/m.
In contrast to expectations of +11.9% y/y, the Italian October CPI came in at +11.8% y/y.
Today’s close on Asian stock markets was mixed. The Nikkei 225 Stock Index (NIK) in Japan closed up +0.14%, while the Shanghai Composite Index (SHCOMP) in China closed down -0.45%.
Today, the Shanghai Composite closed lower as a new round of COVID-19 infections and weak economic data from China continued to trickle in.In October, China’s House Prices Index experienced its worst monthly decline in seven years, coming in at -1.6%.Despite this, optimism over the easing of COVID-related restrictions pushed Chinese stocks higher in recent sessions.
The Real Estate, Paper & Pulp, and Shipbuilding sectors all contributed to today’s uptick in Japan’s Nikkei 225 Stock Index. The implied volatility of Nikkei 225 options is taken into account in the Nikkei Volatility, which closed at a new one-month low of 18.87.
