Bond yields flatline, lifting global stocks and futures
Good morning from… the Eastside of New York. This is the first time I’ve published Bull Sheet from my homeland, the U.S. of A. It’s good to be back in 🇺🇸.
I have only been in the city for a few hours and I’m already seeing for myself the sticker shock. The price of everything, it seems, is through the roof. Five bucks for a box of Triscuits at the local Gristedes supermarket? And, over in the next aisle, what, pray tell, is Asiago-Romano-Parmesan cheese?
I once met a farmer in Emilia Romagna who wanted to haul Wisconsin before the WTO for this kind of labeling.
Back to rising prices… global stocks are going up again. As are U.S. futures. Bond yields are flat (for now), and that’s putting investors in a buy-the-dip mood. Note: as it’s Veteran’s Day, the bond markets will be closed, so don’t expect much movement in yields today.
Meanwhile, crypto has been incredibly choppy in the past 24 hours. It may still prove to be an inflation hedge, but that doesn’t mean it will be a smooth ride.
Let’s see what else is going up (and down).
- The major Asia indexes were mostly higher with the Shanghai Composite closing up nearly 1.2%.
- Investors were breathing a sigh of relief that embattled property developer Evergrande was able to make at least some overdue interest payments, staving off—for now—default. Rather than let the company go bust in spectacular fashion, the Chinese state appears to be dismantling it piece by piece, the Wall Street Journal reports.
- A diplomatic shocker out of Glasgow yesterday… The U.S. and China put aside their differences to announce a pledge to work together to tackle the ravages of climate change. At the very least the pronouncement could breathe some life into the final few days of the COP26 summit, reports Fortune‘s Katherine Dunn from Glasgow.
- The European bourses were mixed at the open, with the Stoxx Europe 600 up 0.1% three hours into the session.
- The European Central Bank could cease its bond-purchasing program by next autumn, a governing council member said on Wednesday. With eurozone inflation running hot, investors are looking for any tapering/tightening clues from the central bank.
- Shares in Moderna fell 3.3% yesterday (they’re down again in pre-market) after Germany’s vaccine commission issued the recommendation that those under 30 and pregnant women opt for the Pfizer COVID jab instead.
- The U.S. futures are bouncing back. The major averages tumbled for a second straight session yesterday as inflation levels have now hit a 30-year high. That took down stocks and bonds on Wednesday. (Incidentally, the last time inflation was this high, I was an undergrad at Rutgers. I had a part-time job that autumn working at Sam Goody on weekends. If my kids ever ask: “Dad, what was Sam Goody?” let’s tell them it was a hedge fund.)
- Shares in Tesla are gaining in pre-market, paring losses to about 12% for the week. The culprit: yep, Elon Musk offloaded $5 billion worth of TSLA shares. At one point earlier this week, Tesla had lost more than $200 billion in market cap.
- The big IPO story yesterday was that of Rivian Motors. Shares in the Ford- and Amazon-backed EV maker closed above 100 bucks on its trading debut. Shares are up a further 5% in pre-market this morning.
- Gold is gaining, living up to its reputation as an inflation hedge. It trades around $1,860/ounce.
- The dollar too is rallying again.
- Crude is flat. Brent trades around $82/barrel.
- Bitcoin has been particularly volatile since yesterday’s CPI print hit. It trades around $65,000 after jumping to near $69K.
Prices jumped 0.9% last month, which is a significant short-term spike. This problem looks anything but transitory as the full-year inflation rate now tops 6%. Remember: the Fed’s stated goal is to keep inflation around 2%.
It’s good to be the landlord
Ford shareholders were no doubt cheering Rivian’s stunning markets debut yesterday. Founder R.J. Scaringe is also America’s newest billionaire this morning.
Have a nice day. I’ll see you here tomorrow… Until then, there’s more news below.
As always, you can write to firstname.lastname@example.org or reply to this email with suggestions and feedback.
Broad Selloff Signals Inflation Fears Are Warming—Wall Street Journal
Quote of the day
We're seeing a market that is showing signs of real frothiness, where you've had some pretty significant stock price moves on relatively small events.
That's hedge fund king Ken Griffin, founder of Citadel Securities, striking a cautious note about the markets outlook yesterday at at The New York Times DealBook conference. He also has his hesitations about crypto.