US: Stocks rebound with consumer prices in focus

[NEW YORK] US equities rose along with European stocks on Thursday (Nov 11) as investors assessed the prospects of higher inflation spurring tighter monetary policy.

The S&P 500 rose 0.4 per cent after the gauge's worst slump in more than a month on Wednesday (Nov 10) following higher-than-expected consumer price data. Tesla Inc rose after filings showed that chief executive officer Elon Musk unloaded US$5 billion of stock. Walt Disney Co slid and Beyond Meat Inc plunged after disappointing quarterly figures.

The Stoxx Europe 600 Index was higher, while in Asia, Chinese equities rallied on speculation of government measures to ease the cash crunch at struggling property developers.

The US cash Treasury market is closed on Thursday for a holiday. Trading conditions in Treasuries are the roughest since March 2020, based on Bloomberg's liquidity gauge for the debt.

Investors are bracing for tighter monetary policy sooner rather than later after Wednesday's inflation data dealt a blow to the argument that inflation is transitory. Meanwhile, the European Central Bank could stop buying bonds as early as next September if inflation looks to have sustainably returned to the official target, Governing Council member Robert Holzmann said.

"This is the perfect time to gravitate toward defensive plays, to take profit and to be in the sectors that are strategically positioned toward this volatile market that presents a lot of challenges," Katerina Simonetti, senior vice-president at Morgan Stanley Private Wealth Management, said on Bloomberg Television.

Elsewhere, the UK's exporter-heavy FTSE 100 Index rose as the pound held near an 11-month low after better-than-expected economic growth data. Oil fluctuated as investors weighed the odds that the White House will intervene to cool prices. Gold approached a 5-month high and Bitcoin hovered near US$65,000.

Stocks futures on the S&P 500 rose 0.3 per cent as at 9.30 am New York time. Futures on the Nasdaq 100 rose 0.8 per cent. Futures on the Dow Jones Industrial Average were little changed. The Stoxx Europe 600 rose 0.2 per cent. The MSCI World index was little changed.

BLOOMBERG