Should the CPI exceed expectations, stocks would come under pressure
Following choppy trading, Wall Street indexes dipped ahead of the closing bell overnight as investors preferred to take some profit ahead of major events. The S&P 500 slipped 0.24%, the Dow dropped 0.34% and the Nasdaq slipped 0.14%. Later today, US inflation data and the FOMC meeting minutes could bring some volatility to the markets. Should the CPI exceed expectations, stocks would come under pressure. On the other hand, upbeat expectations ahead of earnings season cap losses in the market.
Asian equities were mixed on Wednesday. In China, the Shanghai Composite gained 0.42% after the report showed that exports beat expectations while growth in imports disappointed last month. Meanwhile, China’s trade surplus with the U.S. rose to a monthly record of $42 billion. Meanwhile, Tokyo’s Nikkei 225 index fell 0.32% and the S&P/ASX 200 in Australia shed 0.11%. Hong Kong was closed for a holiday.
In Europe, equities opened marginally lower today before turning mixed in recent trading due to strong earnings revealed by LVMH. The French luxury goods maker reported robust quarterly sales. The company’s stocks surged 1.5% following the release. After falling as much as 0.4% in opening trade, the pan-European STOXX 600 index climbed 0.2%.
In currencies, the dollar is lower across the board, reversing yesterday’s gains as traders take profit ahead of inflation data. In general, however, the greenback remains elevated, staying close to the yearly highs. Furthermore, the US currency could stage another rally if the upcoming report shows that consumer prices rose last month. Later in the day, the FOMC meeting minutes could add to dollar strength if the central bank expresses a hawkish tone.
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