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Investors push global stocks and crypto higher even as inflation spikes

October 14, 2021, 9:19 AM UTC

Good morning, Bull Sheeters.

Bond yields are lower for a second straight day, and that’s giving lift to global stocks. Even U.S. equity futures are gaining, looking to pad yesterday’s gains. Again today we have bank earnings—Wells Fargo and Bank of America—and yet more inflation data.

Yesterday’s CPI data came in above expectations. That’s bad news for consumers. But the print didn’t spook investors. As we’ve learned, whenever the move in bond yields is subdued, you can expect a risk-on sentiment in the markets.

Speaking of risk-on… Bitcoin is gaining again, pushing the market cap to $1.1 trillion.

Let’s see what else is moving the markets.

Markets update

Asia

  • The major Asia indexes are bouncing back with the Nikkei up nearly 1.5% in late-afternoon trading. The Hang Seng is off for a public holiday.
  • In the inflation is a global problem category: China released its PPI data this morning showing prices shot up a staggering 10.7% year-on-year, the highest in nearly 26 years, as energy and commodities soar.
  • Speaking of energy…the IEA‘s latest report card is a good-news-bad-news affair. The good: peak oil is just a few years away (2025). The bad: that forecast could easily slip as the world needs to invest trillions in renewables to power the planet.

Europe

  • The European bourses were higher again this morning, with the Stoxx Europe 600 up nearly 0.9%. A half-hour into the trading session, all sectors were in the green, with basic resource and tech leading the way higher.
  • There are real concerns Christmas is in jeopardy in the U.K. A build-up of container ships in Felixstowe, England’s biggest port, has created a giant bottleneck of goods coming in and out of the country.
  • I’m a bit saddened by this news: Italian flag-carrier Alitalia is scheduled to fly its final flight today. Yes, the airline has been a basketcase financially for the past 20 years, but its international flights, I have found, towered over most other airlines.

U.S.

  • The U.S. futures point to another decent open. That’s after the Nasdaq and S&P 500 snapped three-day losing streaks on Wednesday. The laggard yesterday was bank stocks.
  • Shares in JPMorgan Chase fell 2.6% yesterday (they’re up a tiny bit in pre-market) after America’s biggest bank reported mixed numbers: a bottom-line beat, but flattish revenues.
  • Even the Fed couldn’t bail out bank stocks yesterday. The central bank released minutes of its latest FOMC meeting saying tapering looks on schedule to begin next month, or in December. The prevailing wisdom is that tapering and, eventually, tightening, should be welcome events for bank shareholders.
  • After yesterday’s CPI whopper, we get PPI (producer price index) data today.

Elsewhere

  • After Wednesday’s rally, gold is flat, trading just below $1,800/ounce.
  • The dollar is down.
  • Crude is higher again with Brent trading around $84/barrel.
  • Bitcoin is bouncing back. It’s trading above $57,000.

***

Buzzworthy

Inflation nation/ What’s your causation?🎵🎵

If only the Schoolhouse Rocks creators had written an inflation-explainer song. (Or have they?, and I missed it.) The CPI numbers came out yesterday, and the price-rise data surpassed economists’ consensus estimates. It’s true that the year-on-year measurement is a bit skewed on account of, you know, a pandemic. But, by any measure, inflation is running hot, hot, hot. Lower-income households will be feeling the pain.

💵🔥🏠

May you live in a country where a gallon of milk costs 2X a gallon of gas

Here in Italy we use something called liters. Even in metric-system land un litro di latte costs roughly the same as, if not more, than un litro di benzina. High taxes on benzine can explain most of the milk-to-benzine-gas price dynamic here.

🐄🥛⛽

But at least airfare is cheaper

🛫✈️🛬

***

Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

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Market candy

3%

Yep, the typical wage-increase this year comes in at about 3%. That's according to the Conference Board. In normal years a 3%-hike might be maybe-kinda-sorta acceptable, but it's downright stingy in a world of inflation running above 5%. Fortune's Lance Lambert explains just how much workers are getting short-changed as they head into negotiations over pay-raises

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