Stocks rise, US Treasury yields drop after inflation data
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US Treasury yields dip as inflation data suggests cooler PCE reading
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US stocks climb as Tesla and MGM Resorts lead consumer discretionary sector gains
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European stocks rise on Nestle, Siemens results and Ukraine peace talk hopes
(Updates to afternoon U.S. trading)
By Chuck Mikolajczak
NEW YORK, Feb 13 (Reuters) -
A gauge of global stocks climbed on Thursday for the first time in three sessions while U.S. Treasury yields tumbled as an inflation reading fueled hopes the Federal Reserve's preferred measure of prices might be cooler than anticipated.
The Labor Department said the producer price index (PPI) for
final demand rose
0.4% last month after an upwardly revised 0.5% gain in December, topping the estimate of economists polled by Reuters for a 0.3% rise.
The data comes on the heels of Wednesday's consumer price index (CPI), which showed its largest acceleration in nearly 1-1/2 years.
But components of the PPI data that are part of the personal consumption expenditures (PCE), which Fed Chair Jerome Powell
said on Wednesday
is the Fed's preferred targeted inflation measure, were soft and added to hopes the PCE reading may be cooler than currently expected.
"It looks like core PCE will come out at around 0.3%, which is still high, whereas in January of last year, it was 0.5%. If that forecast is correct, core PCE is going to fall from 2.8% to 2.6% year over year," said Chris Diaz, co-head of fixed income at Brown Advisory in Chicago.
"There's going to be enough downward pressure in the shelter component and wages that will continue to put downward pressure on inflation."
On Wall Street, U.S. stocks were higher after the inflation data, with the Nasdaq up more than 1%. Materials led all S&P sectors higher.
Consumer discretionary stocks also advanced, boosted by a rise of about 5% in Tesla and a surge of almost 17% in MGM Resorts after the casino
operator reported
better than expected quarterly earnings.
The Dow Jones Industrial Average rose 343.48 points, or 0.77%, to 44,712.04, the S&P 500 rose 52.00 points, or 0.86%, to 6,103.96 and 에그벳사이트 the Nasdaq Composite rose 235.87 points, or 1.20%, to 19,885.82.
MSCI's gauge of stocks across the globe rose 8.61 points, or 0.99%, to 881.39 and was on track for its biggest daily percentage gain since January 15.
The pan-European STOXX 600 index rose 1.09% for a fourth straight session to close at a record, buoyed by gains in Nestle and Siemens after their quarterly results, as well as hopes for talks to end the war between Russia and Ukraine.
U.S. President Donald
Trump said
on Wednesday that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him on Wednesday, and Trump ordered top U.S. officials to begin talks on ending the war.
The yield on benchmark U.S. 10-year notes tumbled 11.3 basis points to 4.521%, on track for its biggest daily drop in a month. Aside from the PPI data, U.S. initial jobless claims fell 7,000 to a seasonally adjusted 213,000, slightly below the 215,000 level and indicating the job market remains on stable footing.
Still, expectations for a rate cut from the Fed continue to be pushed back this year, with the market not pricing in a chance of more than 50% for a cut of at least 25 basis points until September, according to CME's
FedWatch Tool
.
The dollar index, which measures the greenback against a basket of currencies, fell 0.52% to 107.35 and was on track for its biggest one-day percentage drop since January 24, with the euro up 0.48% at $1.0432.
Croatian policymaker Boris
Vujcic said
the European Central Bank could cut interest rates three more times this year even if its U.S. counterpart moves more slowly, but policy easing would be predicated on a rapid fall in underlying inflation.
Against the Japanese yen, the dollar weakened 0.92% to 152.99.
Sterling strengthened 0.68% to $1.2527. Britain's economy unexpectedly grew by 0.1% in the final quarter of last year, official figures showed, topping the estimate envisaging a contraction of 0.1%, though longer-term challenges remain.
Oil prices were
slightly lower, rebounding from earlier declines as downward pressure from hopes for peace talks between Russia and Ukraine were offset by optimism for a pause in new U.S. tariffs. U.S. crude settled down 0.11% to $71.29 a barrel and Brent fell to settle at $75.02 per barrel, down 0.21% on the day.
(Reporting by Chuck Mikolajczak, additional reporting by Gertrude Chavez-Dreyfuss in New York; editing by Mark Heinrich and Deepa Babington)
*
US stocks climb as Tesla and MGM Resorts lead consumer discretionary sector gains
*
European stocks rise on Nestle, Siemens results and Ukraine peace talk hopes
(Updates to afternoon U.S. trading)
By Chuck Mikolajczak
NEW YORK, Feb 13 (Reuters) -
A gauge of global stocks climbed on Thursday for the first time in three sessions while U.S. Treasury yields tumbled as an inflation reading fueled hopes the Federal Reserve's preferred measure of prices might be cooler than anticipated.
The Labor Department said the producer price index (PPI) for
final demand rose
0.4% last month after an upwardly revised 0.5% gain in December, topping the estimate of economists polled by Reuters for a 0.3% rise.
The data comes on the heels of Wednesday's consumer price index (CPI), which showed its largest acceleration in nearly 1-1/2 years.
But components of the PPI data that are part of the personal consumption expenditures (PCE), which Fed Chair Jerome Powell
said on Wednesday
is the Fed's preferred targeted inflation measure, were soft and added to hopes the PCE reading may be cooler than currently expected.
"It looks like core PCE will come out at around 0.3%, which is still high, whereas in January of last year, it was 0.5%. If that forecast is correct, core PCE is going to fall from 2.8% to 2.6% year over year," said Chris Diaz, co-head of fixed income at Brown Advisory in Chicago.
"There's going to be enough downward pressure in the shelter component and wages that will continue to put downward pressure on inflation."
On Wall Street, U.S. stocks were higher after the inflation data, with the Nasdaq up more than 1%. Materials led all S&P sectors higher.
Consumer discretionary stocks also advanced, boosted by a rise of about 5% in Tesla and a surge of almost 17% in MGM Resorts after the casino
operator reported
better than expected quarterly earnings.
The Dow Jones Industrial Average rose 343.48 points, or 0.77%, to 44,712.04, the S&P 500 rose 52.00 points, or 0.86%, to 6,103.96 and 에그벳사이트 the Nasdaq Composite rose 235.87 points, or 1.20%, to 19,885.82.
MSCI's gauge of stocks across the globe rose 8.61 points, or 0.99%, to 881.39 and was on track for its biggest daily percentage gain since January 15.
The pan-European STOXX 600 index rose 1.09% for a fourth straight session to close at a record, buoyed by gains in Nestle and Siemens after their quarterly results, as well as hopes for talks to end the war between Russia and Ukraine.
U.S. President Donald
Trump said
on Wednesday that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him on Wednesday, and Trump ordered top U.S. officials to begin talks on ending the war.
The yield on benchmark U.S. 10-year notes tumbled 11.3 basis points to 4.521%, on track for its biggest daily drop in a month. Aside from the PPI data, U.S. initial jobless claims fell 7,000 to a seasonally adjusted 213,000, slightly below the 215,000 level and indicating the job market remains on stable footing.
Still, expectations for a rate cut from the Fed continue to be pushed back this year, with the market not pricing in a chance of more than 50% for a cut of at least 25 basis points until September, according to CME's
FedWatch Tool
.
The dollar index, which measures the greenback against a basket of currencies, fell 0.52% to 107.35 and was on track for its biggest one-day percentage drop since January 24, with the euro up 0.48% at $1.0432.
Croatian policymaker Boris
Vujcic said
the European Central Bank could cut interest rates three more times this year even if its U.S. counterpart moves more slowly, but policy easing would be predicated on a rapid fall in underlying inflation.
Against the Japanese yen, the dollar weakened 0.92% to 152.99.
Sterling strengthened 0.68% to $1.2527. Britain's economy unexpectedly grew by 0.1% in the final quarter of last year, official figures showed, topping the estimate envisaging a contraction of 0.1%, though longer-term challenges remain.
Oil prices were
slightly lower, rebounding from earlier declines as downward pressure from hopes for peace talks between Russia and Ukraine were offset by optimism for a pause in new U.S. tariffs. U.S. crude settled down 0.11% to $71.29 a barrel and Brent fell to settle at $75.02 per barrel, down 0.21% on the day.
(Reporting by Chuck Mikolajczak, additional reporting by Gertrude Chavez-Dreyfuss in New York; editing by Mark Heinrich and Deepa Babington)
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