By Mike Dolan
Oct 14 (Reuters) – What matters in US and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Some calm has returned to the wobbly chip sector this morning as market attention now swings back to today’s US inflation report and a likely fuel-aggravated pickup in price rises last month.
I’ll get into all that and more below.
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TRILLION DOLLAR TRADE
While tech stocks on Wall Street closed lower again on Tuesday, the big chip bellwethers in South Korea and around Asia firmed up slightly first thing today.
But attention now shifts to the US CPI release. With global crude oil prices still straining at around $106 per barrel on Middle East tensions, US headline inflation is expected to have jumped as high as 3.7% in September, almost twice the Federal Reserve’s target rate.
But with core rates excluding energy and food expected to run cooler at about 2.5%, some Fed officials are relatively relaxed about the policy horizon ahead. New York Fed chief John Williams said on Tuesday that while another Fed hike may be needed by year end, he saw no reason to expect another one in 2027. Given that the futures market is still priced for three more rate rises, that statement is apt to resonate. Bond markets were certainly calmer over the past 24 hours despite the punchy oil price.
US bank stocks stumbled, however, after several released their third quarter earnings, with JPMorgan and Goldman Sachs reporting unexpectedly large hits to their fixed income trading business during a volatile quarter that saw the first Fed rate rise in three years and plunging bond prices. Citigroup recorded the biggest drop on the day, losing more than 5%. Morgan Stanley, Bank of America and BlackRock are among the big financial names reporting on Wednesday.
Elsewhere, China’s exports soared more than expected last month on big shipments of tech equipment and cars, rising more than 30% on an annual basis and putting the country on course for another trillion dollar surplus in 2026, a month earlier than it did last year. Consumer inflation in China remained subdued even as factory input prices rose sharply, while imports during the month also beat forecasts.
CHART OF THE DAY
China’s trade surplus widened more than expected in September as exports surged, keeping the country on track to surpass last year’s record surplus and likely intensifying trade tensions with major partners. Global demand for semiconductors and green-tech products has helped keep China’s factories humming, with exports soaring 36% from a year earlier, the fastest pace since February. This outstripped August’s 25% rise and far exceeded expectations for 26% growth. Even though import growth beat forecasts too, China’s trade surplus reached $938 billion for the first nine months of this year and is on course to top the trillion-dollar level a month earlier than it did last year.
TODAY’S EVENTS TO WATCH
* US September CPI inflation
* Fed releases Beige Book on economic conditions. Fed board governor Michelle Bowman and Richmond Fed President Thomas Barkin speak
* US corporate earnings: Bank of America, Morgan Stanley, BlackRock, Progressive
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Writing by Miike Dolan; editing by Anna Szymanski)
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