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Investment Daily: US stocks fell as Treasury yields rose sharply ahead of CPI data

13 Nov 2024

Key takeaways

  • US stocks and Treasuries fell ahead of CPI inflation data.
  • European stocks and government bonds fell.
  • Asian stocks declined.

Markets

  • US stocks fell on Tuesday amid higher Treasury yields. The S&P 500 ended 0.3% lower.
  • US Treasuries fell sharply (yields jumped) ahead of US CPI inflation data as investors pared expectations for the extent of Fed rate cuts over the next year. 10-year yields rose 13bp to 4.43%.
  • European stock markets fell on Tuesday amid concerns over US policy uncertainty. The Euro Stoxx 50 fell 2.3%. The German DAX lost 2.1%, as the French CAC dropped 2.7%. In the UK, the FTSE-100 fell 1.2%.
  • European government bonds fell (yields rose) on political uncertainty in the US and Germany. 10-year German yields were up 3bp to 2.36%, as French yields rose 4bp to 3.12%. In the UK, 10-year gilt yields climbed 8bp to 4.50%. 
  • Asian stock markets broadly fell on Tuesday amid lingering geopolitical concerns and weaker currencies in the region. Chinese equities declined following weaker-than-expected October credit data, with China’s Shanghai Composite and Hong Kong’s Hang Seng dropping 1.4% and 2.8%, respectively. Japan’s Nikkei 225 slid 0.4% on some downbeat corporate earnings, as Korea’s Kospi declined 1.9%, led by losses in electronics stocks.  Elsewhere in Asia, India’s Sensex lost 1.0%.  
  • Crude oil prices held near a two-week low on Tuesday amid a stronger US dollar, and as OPEC cut its demand growth forecasts. WTI crude for December delivery settled at USD68.1 a barrel (+0.1%).

Key Data Releases and Events

Releases yesterday

  • In the US, the NFIB small business confidence index increased to 93.7 in October from 91.5 September. 
  • In India, headline CPI inflation picked up more than expected in October, up 6.2% yoy (vs. consensus forecast of +5.9% yoy) from a 5.5% yoy gain in September. The acceleration was led by higher food prices, though core inflation also rose. 
  • In the UK, the unemployment rate rose to a four-month high of 4.3% in the three months to September, from 4.0% in August, as the UK labour market shows signs of softening.No major data releases.

Releases due today (13 November 2024)

  • In the US, headline CPI inflation likely picked up on energy prices in October to 2.6% yoy, from 2.4% yoy in September, but core inflation should trend lower in the coming months.

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