Stocks, Futures Up; Inflation Risk Saps Treasuries

12/11/2021 Stocks are higher with U.S. and European equity futures this morning, bringing some relief for shares from the inflation fears still roiling Treasuries. MSCI Inc.’s Asia-Pacific gauge posted its biggest rise this week, bolstered by Japan’s bourse and Chinese technology stocks. The view that the worst of Beijing’s regulatory blitz has passed helped sentiment. U.S. and European contracts pushed higher after the S&P 500 snapped a two-day slide. The dollar held a rally in the wake of the inflation print and caution triggered by a U.S. warning that Russia may be weighing a potential invasion of Ukraine. Oil and gold slipped, while Bitcoin was steady. Global stocks are set for their first weekly drop since early October, hurt by signs that price pressures are broadening out beyond pandemic-related disruptions. But swings in equity indexes pale in comparison to bond market ructions, raising the question of whether stock investors are too sanguine.

Locally the mining stocks led the JSE charge, the All-Share closed up 1.25% with AMS, AGL and IMP closing up 7.23, 5.81 and 5.44 percent respectively. The rand broke a two-day losing streak on Thursday as investors welcomed the medium term budget policy statement, staging a mild recovery after falling the most in more than eight months in the previous session. Rand is R 15.29/$ and R 20.44/GBP. We should be in for a positive start with Tencent up 1.47%, Asia positive and US and European futures in the green. IG Top 40 + 244 points.

Richemont 1H just out :

• RICHEMONT 1H OPER PROFIT EU1.95B, EST. EU1.49B,
• 1H OPER MARGIN 21.9%, EST. 16.8%,
• 1H SALES EU8.91B, EST. EU8.60B,
• PRE-PANDEMIC SALES LEVELS EXCEEDED IN MOST AREAS.

Headlines:

• Godongwana Says Right Things But Leaves Investors Wary: Reaction
• South Africa Seeks to Rein In Debt, Hold Off Welfare Boost
• South Africa Warns of State Job Cuts if Court Backs Pay Deal
• F.W. De Klerk, Mandela’s Partner in Ending Apartheid, Dies at 85
• Rallying Miners Set S. African Stocks on Course for August High

In Europe stocks closed higher as global market players digested the latest U.S. inflation data, which showed persistent price rises. The pan-European Stoxx 600 closed up by 0.3% provisionally, boosted by a 3.7% surge in mining shares. At the opposite end, Europe’s basket of travel and leisure stocks dipped around 1.1%. FTSE + 0.60%, CAC + 0.20% and the DAX + 0.10%. On the data front in Europe, U.K. GDP grew by 0.6% in September, the Office for National Statistics said yesterday, while figures for the previous months were revised downward, leaving the economy still 0.6% smaller than it was in February 2020 before the country’s first Covid-19 lockdown.

Overnight in the US, the Nasdaq rose 0.52% while the S&P 500 advanced just 0.06%. The Dow lagged, declining 158.71 points or 0.44%. Through Thursday, the Dow is down 1.1% for the week, while the S&P 500 and Nasdaq are down 1% and 1.7%, respectively. After a busy week of earnings and economic data releases, today is relatively light for investors. The preliminary read for November consumer sentiment and the September report on job openings and labor turnover will be released at 14:30 loval time today. .
Shares in Asia-Pacific are mostly higher following overnight gains for tech stocks stateside as the Nasdaq Composite rebounded. The Hang Seng gained 0.22% by the afternoon, with shares of JD.com soaring nearly 5% following the Singles Day online shopping event, while Alibaba dropped 1.41%. Both companies set new sales records across their platforms on Singles Day. The Nikkei gained 1.12% while the Topix index rose 1.1%. In South Korea, the Kospi climbed 1.38%. Australian stocks also rose as the S&P/ASX 200 gained 0.85% and the Mining Index was up 2.07%. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.35% higher.
Gold is a tad softer this morning but is set for its biggest weekly jump in six months, as high U.S. consumer prices drove interest in the metal as an inflation hedge. The metal is on track for its biggest weekly gain since May 7, rising 2.3% so far. Spot Gold – 0.19% $ 18.59, Platinum flat at $ 1088 and Palladium – 0.37% $ 2053.
Oil prices have drifted lower this morning, wiping out gains from the previous session, as the dollar continued to rise on bets the U.S. central bank will bring forward plans to raise rates to tame inflation.Both Brent and WTI contracts are poised to end the week roughly unchanged after sharp moves up and down, driven by a soaring dollar and speculation on whether the Biden administration might release oil from the U.S. Strategic Petroleum Reserve to cool prices. Brent – 0.68% $ 82.31, WTI – 0.65% $ 81.05.