NEW YORK (Reuters) – Wall Street closed sharply lower on Wednesday as surging consumer prices curbed investor risk appetite, and stoked worries of a protracted wave of red hot inflation.

All three major U.S. stock indexes fell, extending their losses throughout the trading day and adding to Tuesday’s sell-off which snapped the S&P 500’s and Nasdaq’s eight-session runs of all-time closing highs.

“It’s not surprising that after what was truly a historic run for the market to take a pause,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “But we do think there are enough tailwinds heading into year-end to move the market higher.”

The Labor Department’s consumer price index (CPI), delivered a hotter-than-expected jump of 0.9% and the fastest year-on-year gain in 31 years.

The report hinted that the persistently tangled global supply chain could result in the current inflation wave taking longer to abate than many – including the U.S. Federal Reserve – had hoped.

“The inflation story is really the driver that drives all things,” Mayfield added. “It will affect Fed policy and fiscal policy, it’s the driver of interest rates. It’s hard to talk about anything but inflation.”

And Gregory Daco, chief economist of Oxford Economics, believes this report means current price spikes have some staying power.

“I think things will continue to get worse before they get better in terms of the inflation outlook because we don’t see core inflation peaking until sometime in early 2022,” Daco said.

The Dow Jones Industrial Average fell 240.04 points, or 0.66%, to 36,079.94, the S&P 500 lost 38.54 points, or 0.82%, to 4,646.71 and the Nasdaq Composite dropped 263.84 points, or 1.66%, to 15,622.71. Of the 11 major sectors in the S&P 500 eight closed red, with energy suffering the biggest percentage losses. Utilities led the gainers.

Tech weighed heaviest on the S&P 500, with megacaps Apple Inc and Microsoft Corp among the biggest drags. Third-quarter earnings season has reached the final stretch, and of the companies having reported, 81% have beaten street expectations.

Walt Disney Co shares dropped more than 4% in after-hours trading after the media company reported disappointing streaming subscriber numbers.

Tesla Inc rose 4.3%, reversing several sessions of declines in the wake of CEO Elon Musk’s polling Twitter users on whether he should sell 10% of his stake in the company he founded.

This comes as rival electric vehicle maker Rivian Automotive Inc made its splash as a publicly traded company, raising $12 billion. Its shares surged 29.1%.

Retail trading platform Robinhood Markets Inc plunged 6.0%, adding to its losses two days after reporting a security breach affecting 5 million customers. Declining issues outnumbered advancing ones on the NYSE by a 2.26-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners.

The S&P 500 posted 26 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 95 new highs and 121 new lows. Volume on U.S. exchanges was 11.72 billion shares, compared with the 10.89 billion average over the last 20 trading days.

Reporting by Stephen Culp; additional reporting by Karen Pierog in New York, and Shreyashi Sanyal and Devik Jain in Bengaluru; editing by Diane Craft

HONG KONG (Reuters) – Asian shares followed Wall Street higher in early trade on Tuesday as the passage of a U.S. infrastructure bill boosted sentiment while oil prices gained on the outlook for energy demand in an expansive global economy.

The congressional passage of a long-delayed U.S. $1 trillion infrastructure bill over the weekend has cheered investors, who however face another test later in the week from a reading on U.S. inflation that may influence plans for tightening monetary policy.

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%. Japan’s Nikkei stock index rose 0.06% while Australian shares were down 0.12%. China’s blue-chip CSI300 index was 0.33% higher in early trade. Hong Kong’s Hang Seng index opened up 0.65%.

On Monday, Wall Street’s benchmark S&P 500 index and the Nasdaq extended their run of all-time closing highs to eight straight sessions, while the blue-chip Dow notched its second consecutive record closing high.

A 4.9% decline in Tesla Inc shares however weighed on the S&P 500. Tesla fell after Chief Executive Elon Musk’s Twitter poll on whether he should sell about 10% of his stock in the electric automaker. The poll garnered more than 3.5 million votes, with 57.9% voting “Yes”.

World shares also rose on Monday after hitting a record high last week as relatively dovish central bank messages and strong U.S. labour data on Friday added to optimism generated by a healthy earnings season on both sides of the Atlantic.

But a tight U.S. labour market and the dislocation in global supply chains could result in a high reading for consumer prices on Wednesday. Strong inflation likely would rekindle talk of Federal Reserve raising interest rates earlier than expected.

“Although Chair Powell maintains the Fed can be patient with regards to rate hikes, with measures of underlying inflation and wages intensifying and broadening, the clock is ticking on how long the it can hold that line,” ANZ analysts said in a note.

Traders also sent most U.S. Treasury yields higher on Monday after Congress passed the infrastructure bill on Saturday. The yield on benchmark 10-year Treasury notes touched 1.4862% compared with its U.S. close of 1.497% on Monday. The dollar index, which tracks the greenback against a basket of six currencies, was up at 94.075.

Oil prices firmed as the passage of the U.S. infrastructure bill and China’s export growth supported the outlook for energy demand. Saudi Arabia’s state-owned producer Aramco also raised the official selling price for its crude.

U.S. crude ticked up 0.15% to $82.05 a barrel. Brent crude rose to $83.59 per barrel. Spot gold was slightly lower, trading at $1,823.3 per ounce. [GOL/]

(Prepared by Julie Zhu, Editing by Lincoln Feast.)

SYDNEY, Nov 8 (Reuters) – Bitcoin rose to a two-and-a-half-week peak on Monday and ether climbed to a fresh record as cryptocurrencies ride higher on a wave of momentum, flows, favourable news and inflation fears.

Bitcoin was last up about 3% at $65,121 and ether , which underpins the ethereum network, sat at a record top of $4,711. Ether is up 57% since the start of October and bitcoin about 50% as investors have cheered last month’s launch of a U.S. futures-based bitcoin exchange-traded fund and sought exposure to an asset class sometimes regarded as an inflation hedge.

Falling real yields, as traders brace for inflation, adds to the attractiveness of assets such as gold and cryptocurrencies which do not pay a coupon, said Kyle Rodda, analyst at broker IG Markets, adding that the mood in the sector has also been good.

“Financial institutions want to be a part of it, regulators don’t want to clamp down on it too much,” he said. “We’re almost past the inflection point, where it’s part of the system and its going to be very, very hard to extricate it.”

In recent weeks Australia’s biggest bank has said it will offer crypto trading to retail customers, Singaporean authorities have sounded positive on the asset class and spillover from a positive mood in stocks has also leant support.

Last week New York Mayor-elect Eric Adams said he would take his first three paychecks in bitcoin and signaled his intention to make his city the “center of the cryptocurrency industry” after a similar pledge from Miami’s mayor. read more

Reporting by Tom Westbrook; Editing by Muralikumar Anantharaman

SINGAPORE (Reuters) – The dollar held within striking distance of the year’s peaks on the euro and yen on Wednesday, as investors looked for the Federal Reserve to begin unwinding pandemic-era policy support faster than central banks in Europe and Japan.

Moves were slight in Asia ahead of the Fed’s meeting later in the day and the dollar bought 113.94 yen , against a 2021 peak of 114.69, and traded at $1.1578 per euro against the year’s top of $1.1522 per euro. The U.S. dollar index held overnight gains to sit at 94.117.

The Fed is expected to announce the tapering of its $120 billion-a-month asset purchase programme in its policy statement at 1800 GMT. read more

But traders are focused on clues around what that means for timing of rate rises, after a month of seismic moves in the bond market in anticipation of hikes as soon as next year.

A day ago, the Reserve Bank of Australia abandoned its short-term yield target and dropped its expectation of holding rates at record lows until 2024, though the Aussie fell because the bank also pushed back on aggressive pricing for 2022 hikes. read more

The Aussie had dropped 1.2% against the dollar on Tuesday and sat at $0.7430 on Wednesday. The kiwi was also dragged 1% lower, but found support on Wednesday from strong labour data and hovered at $0.7123.

Currency markets’ next moves likely depend on traders’ perception of the relative pace of policy tightening and on whether markets can stick with an assumption that the Fed funds rate won’t get much higher than 1.75% through the cycle.

“Fed Policy is under challenge in ways that cannot be remembered since the early Volcker years,” said Deutsche Bank strategist Alan Ruskin.

“Inflation is taking off with an economy that has been pricing itself off zero nominal rates and dramatic negative real rates for the last 18 months,” he said.

So far, the dollar had been held back by rising expectations of even faster hiking elsewhere in the world, but risks lie ahead if traders start to think that more than a few rate rises will be needed to tame fast-rising prices.

“If the expected resilience of the real economy to rate hikes is correct, and inflation is similarly stubborn, the market expectations on the terminal funds rate at near 1.75% by the end of 2026 looks way too low,” he said.

Also ahead this week is a Bank of England meeting where swaps pricing points to a modest rate hike, but a falling currency suggests a risk of disappointment or at least of a fairly stern pushback against market inflation expectations.

“I lean towards a 15bps hike at this meeting with a 5-4 vote in favour,” said Luke Suddards, strategist at broker Pepperstone.

“However, because this is basically baked into the price, I would say the risk is for sterling to weaken if they decided rather to hold and we see some dovish repricing in money markets.”

Sterling sat just above a two-week low at $1.3620 in Asia, roughly in the bottom half of range it has traded since July.

Besides the Fed meeting, eurozone unemployment data is due later on Wednesday and several European Central Bank officials make public appearances, with French central bank head Francois Villeroy de Galhau the most notable at 1300 GMT.

Reporting by Tom Westbrook; Editing by Sam Holmes

HONG KONG, Oct 25 (Reuters) – Shares in China Evergrande Group’s electric vehicles (EV) unit <0708.HK> rose on Monday as the embattled property developer moved to prioritise the growth of its nascent EV business over its troubled core real estate operations.

Evergrande (3333.HK) , reeling under more than $300 billion in liabilities, averted a costly default last week with a last-minute bond coupon payment, buying it more time to head off a looming debt crunch with its next major payment deadline on Friday. read more

An announcement by its chairman, Hui Ka Yan, reported by state media on Friday, that it would make its new electric vehicle venture its primary business, instead of property, within 10 years, cheered investors on Monday.

Evergrande rose as much as 6% during the session before closing down 0.7%. China Evergrande New Energy Vehicle Group Ltd (0708.HK)rose 11.4%. The benchmark Heng Seng Index (.HSI) was flat.

Raymond Cheng, CGS-CIMB Securities’ head of China research, said the business shift makes sense given Beijing’s growing support for EVs and its increased tightening of the frothy real estate sector. “This is the best outcome, if it just focuses on existing developments and maintains the operation,” Cheng said.

While the move would help Evergrande deleverage by gradually scaling down its massive undeveloped land holdings, Cheng said it was unclear how it would affect the company’s planned disposals including stakes in the EV unit.

Evergrande’s new vehicle business, founded in 2019, has yet to reveal a production model or sell a single vehicle. Last month, the unit warned it was still seeking new investors and asset sales, and that without either it might struggle to pay salaries and cover other expenses.

Hui expects property sales will slow to about 200 billion yuan ($31.31 billion) per year within the 10-year period, compared to more than 700 billion yuan last year, China’s Securities Times reported on Friday.

Reporting by Clare Jim and Donny Kwok in Hong Kong, Andrew Galbraith in Shanghai, Jing Xu in Beijing; editing by Richard, Pullin, Sam Holmes and Christian Schmollinger

NEW YORK, (Reuters) – The first U.S. bitcoin futures-based exchange-traded fund began trading on Tuesday, sending bitcoin to a six-month high and just off its all-time peak, as traders bet the ETF could boost investment flows into cryptocurrencies.

The ProShares Bitcoin Strategy ETF closed up 2.59% at $41.94 in its first day of trading, with around $1 billion worth of shares trading hands on Intercontinental Exchange Inc’s (ICE.N) NYSE Arca exchange under the ticker BITO.

The greenlighting of the ETF by the U.S. Securities and Exchange Commission was seen as a watershed moment for cryptocurrencies and helped push the price of bitcoin as high as $64,367.14, its highest level since mid-April and near its record of $64,895.22.

Bitcoin, the world’s largest cryptocurrency, is notoriously volatile, and has risen around 45% this month on hopes that the advent of U.S. bitcoin ETFs – several of which are in the works – will spur billions of dollars managed by pension funds and other large investors to flow into the sector.

On Tuesday, there were very few block trades in BITO, suggesting that smaller investors and high-frequency trading firms dominated trading, said Dave Nadig, chief investment officer and director of research at ETF Trends.

“I think what we saw today was retail, HFT algo trading trying to find the arbitrage, and a whole lot of institutions sitting on the sidelines and watching,” he said.

Similar products were set to come to market, with Nasdaq Inc (NDAQ.O) having approved the listing of the Valkyrie Bitcoin Strategy ETF on Friday, while Grayscale, the world’s largest digital currency manager, said it plans to convert its Grayscale Bitcoin Trust (GBTC.PK) into a spot bitcoin ETF. read more

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing U.S.-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

The SEC has yet to approve a spot bitcoin ETF.

Bitcoin futures have been overseen by the Commodity Futures Trading Commission for four years and ETFs are regulated by the SEC, offering some level of investor protection, the SEC’s chair, Gary Gensler, said on Tuesday.

“Yet it’s still a highly speculative asset class and investors should understand that underneath, there is the same volatility and speculation,” he told CNBC.

Bitcoin futures were up 4.85% at $64,640.

Reporting by John McCrank in New York and Tom Wilson in London Additional reporting by Tom Westbrook in Singapore and Katanga Johnson in Washington Editing by Andrea Ricci and Matthew Lewis

Oct 15 (Reuters) – Goldman Sachs Group Inc (GS.N) on Friday reported a 66% surge in third-quarter profit that smashed expectations, as Wall Street’s biggest investment bank rode a record wave of M&A activity and initial public offerings.

The bank posted profits of $5.28 billion up from $3.23 billion a year ago, capping a stellar quarter for Wall Street lenders, which have benefited from a rebounding U.S. economy, soaring equity markets and a global deal-making bonanza. Shares of Goldman Sachs were up 2% in mid-morning trading.

Global M&A volumes have shattered all-time records, with deals worth over $1.5 trillion inked by the world’s biggest investment banks in the third quarter, according to Refinitiv data. Goldman comfortably held its top ranking as the world’s leading bank in M&A advisory, according to the Refinitiv data.

Those surging M&A fees drove Goldman Sachs’ overall financial advisory revenue up 225% to $1.65 billion, while underwriting revenue, which has been boosted by a rush of private companies looking to go public, surged 33% to $1.90 billion.

All told, Goldman’s investment bank boasted its second-best quarter ever, with total revenue of $3.70 billion, and executives said they expect revenues to continue to be strong. “I remain optimistic about (opportunities),” Goldman Sachs Chief Executive Officer David Solomon said on a call with analysts. “Activity levels remain high particularly in investment banking.”

Earnings per share were $14.93 from $8.98 a year earlier, outstripping the $10.18 per share analysts had predicted, according to the IBES estimate from Refinitiv. Goldman’s global markets trading business, which accounts for roughly 41% of overall revenue, reported revenue of $5.61 billion, up 23%.

The bank has been steadily expanding its prime brokerage business, where it handles trades for hedge funds, picking up clients and assets as other banks have trimmed their prime divisions. Additionally, it has gained market share when it comes to financing clients’ equity investing, according to its quarterly report.

Those gains in prime brokerage and equity financing helped Goldman roughly double its equity trading revenue this quarter to $3.1 billion from $2.1a year ago. That was higher than rival Morgan Stanley, which reported trading revenue of $2.87 billion and is typically number one in this line of business.

Morgan Stanley (MS.N) said on Thursday that its third-quarter profit rose 38%, while JPMorgan Chase & Co (JPM.N) reported a 24% rise. read more Citigroup Inc. (C.N) and Bank of America Corp (BAC.N), which were likewise buoyed by deal fees and equities trading, increased profits by 48% and 64%, respectively. All the banks handily beat estimates.

“Clearly, upside was anticipated given what we’d seen from peers, but not this much upside,” Credit Suisse analyst Susan Roth Katzke wrote in a note to investors on Friday. “The beat was broad-based.”

Reporting by Noor Zainab Hussain, Anirban Sen, Elizabeth Dilts and Matt Scuffham; Editing by Arun Koyyur and Nick Zieminski

NEW YORK (Reuters) – Investors are primed for another period of strong U.S. profit growth as third-quarter reports from Corporate America flow in starting next week. But as business continues to emerge from the coronavirus pandemic, new problems are arising that are taking center stage for Wall Street, including supply-chain snags and inflationary pressures.

In the run-up to earnings season, a number of companies have issued downbeat outlooks. FedEx Corp said labor shortages drove up wage rates and overtime spending, while Nike Inc blamed a supply-chain crunch and soaring freight costs as it lowered its fiscal 2022 sales estimate and warned of holiday-season delays.

“The pace of growth is decelerating, but still it’s at a meaningful level,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. With the product and labor shortages and inflationary pressures, “we’ll be looking to see to what extent demand is there, and what does it mean for the important holiday spending period.”

Analysts see a 29.6% year-over-year increase in earnings for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday, down from 96.3% growth in the second quarter. The third-quarter forecast is down a touch from several weeks ago, a reversal of the recent trend for estimates.

Third-quarter earnings growth was always expected to be much lower than the blowout gain of the second quarter, when companies had much easier year-ago comparisons because of the pandemic.

“We were going up at such a high clip. The positive revision momentum has lapsed,” said Nick Raich, CEO of independent research firm The Earnings Scout. Earnings season is kicking off this week with the big banks including JPMorgan Chase.

Investors are weighing the impact of sharply higher energy costs on businesses and consumers after a recent surge in oil and natural gas prices. While higher energy prices should be a boon for energy producers, they are an inflationary risk for many other companies like airlines and other industrials and cut into consumer spending.

U.S. companies have so far this year kept profit margins at record levels because they have cut costs and passed along high prices to customers. Some investors are anxious to see how long that can go on.

Third-quarter earnings arrive with the market still wobbly after a weak and volatile September. The S&P 500 in September registered its biggest monthly percentage drop since the onset of the pandemic in March 2020. It was also the index’s first monthly decline since January.

“COVID-related supply chain issues have spread beyond consumer goods. And longer-term signs of global friction are easy to find,” Savita Subramanian, head of U.S. equity & quantitative strategy at BofA Securities, wrote in a note on Friday. But she said these issues are far from being fully priced into stocks.

Morgan Stanley’s analysts say that consensus earnings expectations also have not fully priced in the supply-chain constraints facing companies, making it much harder for companies to surpass estimates at the same rate as in recent quarters.

“Consumer Discretionary companies of all kinds are right in the cross hairs of the supply shortages, higher logistics costs and higher labor costs,” they wrote. Those strategists see the equity market set for a bigger pullback, and say third-quarter earnings could determine how deeply the stock market dips.

Reporting by Caroline Valetkevitch in New York; Editing by Megan Davies and Matthew Lewis

HONG KONG, Oct 6 (Reuters) – Asian shares dropped on Wednesday, reversing early gains, after an overnight rebound in U.S. and European stocks as investors shrugged off worries about a potential U.S. government debt default, while oil paused near new multi-year highs.

The gains in oil are driven by concerns about energy supply, and come two days after the OPEC+ group of producers stuck to its planned output increase rather than raising it further.

U.S. crude rose to its highest level since 2014 on Wednesday but pared gains and was last off 0.09% to $78.87 a barrel. Brent crude lost 0.08% to $82.49 per barrel, having hit a three-year high in the previous session.

“OPEC’s outlook suggests further reductions in global oil stockpiles. That’s a problem given that oil inventories are already low,” wrote analysts at CBA in a note.

Rising prices could threaten the global economic recovery as global oil demand growth was picking up as economies re‑opened on the back of rising vaccination rates, they added.

In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 0.6%, reversing early gains, while Japan’s Nikkei (.N225) lost 0.78%.

Traders say markets are jittery due to worries about China’s real estate market as well as approaching higher interest rates around the world.

There were falls in Hong Kong (.HSI) off 1%, Korea (.KS11) down 0.9% and Australia down 0.45%. U.S. stock futures, the S&P 500 e-minis shed 0.44%.

Chinese markets remained closed for a public holiday, and shares of cash-strapped Chinese developer China Evergrande (3333.HK) were suspended having stopped trading on Monday pending an announcement of a significant transaction.

Uncertainty about Evergrande’s fate roiled Chinese property developers’ bonds and Hong Kong-listed shares and bonds on Tuesday following fresh credit rating downgrades. read more

Elsewhere, New Zealand’s central bank raised interest rates by 25 basis points but reaction was muted as the move to increase the cash rate to 0.50% was widely expected. The announcement caused the New Zealand dollar to rise about 0.1%, before falling 0.34%.

Overnight the Dow Jones Industrial Average (.DJI) rose 0.92%, the S&P 500 (.SPX) gained 1.05% and the Nasdaq Composite (.IXIC) climbed 1.25%, despite worries that the United States will default on its debt.

The Senate will vote on Wednesday on a Democratic-backed measure to suspend the U.S. debt ceiling, a key lawmaker said on Tuesday, as partisan brinkmanship in Congress risks an economically crippling federal credit default.

These fears, however, did help push the dollar back towards its 12-month highs and benchmark treasury yields to near their highest level since mid June.

In Asian trading, the dollar hovered close to its highs for the year against a basket of its peers , while the euro EUR=EBS stayed near its 14-month low struck last week. The safe-haven yen JPY=EBS fell about 0.5%, reflecting a positive mood in equity markets.

The yield on benchmark 10-year Treasury notes rose to 1.5466%, nearing a four-month high of 1.5670% hit in late September. Spot gold shed 0.15% to $1757.3 an ounce, with the non-interest bearing asset hurt by higher yields.

Editing by Stephen Coates

Oct 03, 2021 (Investing.com) – The dollar was down on Monday morning in Asia, but remained near the highs hit during the previous week, thanks to renewed concerns about China Evergrande Group’s (HK:3333) debt woes and the latest U.S. jobs report, due later in the week.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.04% to 94.052 by 11:39 PM ET (3:39 AM GMT).The USD/JPY pair inched up 0.01% to 111.06. The AUD/USD pair inched up 0.02% to 0.7258 while the NZD/USD pair edged down 0.13% to 0.6934. The USD/CNY pair was steady at 6.4467 with Chinese markets closed for a holiday. The GBP/USD pair inched down 0.07% to 1.3536.

Shares in developer China Evergrande Group were halted in Hong Kong earlier in the day. No reason was given for the suspension, which re-triggered fears about global contagion from the developer’s debt woes.

“There’s a bit of nervousness,” even if most traders still think China Evergrande’s systemic risk can be contained, Bank of Singapore currency analyst Moh Siong Sim told Reuters.

“It’s part of the wall of worry,” which the market could eventually “climb” if the COVID-19 backdrop improves, growth stabilizes and inflation concerns subside, but which for now is keeping investor sentiment fairly dour, he added.

Meanwhile, the Reserve Bank of Australia will hand down its policy decision on Tuesday, with the Reserve Bank of New Zealand following a day later and the Reserve Bank of India will hand down its decision on Friday.

The U.S. will also release its latest jobs report, including non-farm payrolls, on Friday, and is likely to be good enough for the U.S. Federal Reserve to begin asset tapering before the end of 2021.

“The question is whether there is a number that alters the Fed’s view on tapering its bond purchases in November, and what a really weak or hot number means amid the backdrop of rising stagflation fears,” Pepperstone head of research, Chris Weston told Reuters.

“If U.S. treasuries find further buyers this week into non-farm payrolls, the dollar may go on sale this week.”

By Gina Lee