Stocks ended higher after soft inflation data and Walmart beat earnings forecast. Before today’s Bank of England testimony on the November Monetary Policy Report, UK inflation data fail to push the GBP/USD toward $1.20.

The Dow Jones Industrial Average increased 56 points, or 0.17%, to 33,593, while the S&P 500 ended 0.87% higher. The tech-focused Nasdaq gained 1.45%.

The Dow Jones Industrial Average finished the day up 56.22 points, or 0.17%, at 33,592.92. The tech-heavy Nasdaq Composite climbed 1.45% to close at 11,358.41, while the S&P 500 gained 0.87% to settle at 3,991.73.

The Dow Jones Tuesday

The Producer Price Index, a wholesale inflation gauge, showed a 0.2% increase for the month of October versus the consensus prediction for a 0.4% increase from Dow Jones, and the major averages rose as a result. 

The revelation comes after last week’s consumer price index data indicated that there was a decrease in inflation last month, which led to a significant surge.

According to the Commerce Department, producer price inflation fell to 8% last month, which is more than three percentage points lower than the multi-decade highs achieved in March of this year and much below the Street consensus prediction.

S&P 500 Tuesday

The PPI data, which came after last week’s weak reading of consumer price inflation, may lead to additional questions over whether inflation has peaked in the largest economy in the world.

The Tuesday data came as equities declined last night in response to remarks by Lael Brainard, vice chair of the Federal Reserve, in which she suggested a short-term pause in the central bank’s rate path while admonishing that inflation rates remain far too high.

With core retail sales due today and major retail earnings above estimates, the market is also considering how much inflation is impacting consumers.

Earnings Boost Stocks

Stronger-than-anticipated third-quarter results from Walmart (WMT) and Home Depot (HD), which was able to increase sales and profits despite the ongoing housing market downturn, all contributed to the bullish sentiment.

Before the end of the week, stocks will probably become even more complicated as a result of today’s earnings releases from Target (TGT), NVIDIA Corporation (NVDA), and Lowe’s (LOW), as well as Thursday’s retail earnings from Ross Stores, Inc. (ROST) and Alibaba Group Holding Limited (BABA).

This week, investors’ attention will also be on the third quarter results season’s closing stages. More than 450 companies have reported thus far, and overall profits are anticipated to increase 4.1% from last year to $462.8 billion, largely due to the energy sector’s exceedingly strong performance.

Treasury Yields Fall, Futures Rise

Following the release of the PPI data, the benchmark 10-year Treasury note yield fell 7 basis points to 3.82% in New York trading, while the yield on 2-year notes fell to 4.391%. The U.S. dollar index, which measures the value of the dollar relative to a basket of its international peers, was down 0.15% at 106.50.

As fears that a rocket that struck near the Polish border was fired by Russia and signaled an uptick in the Ukrainian war receded, US futures increased. Contracts on the Nasdaq 100 increased by a similar amount, and those on the S&P 500 reversed falls to trade 0.2% higher. 

After increasing for four straight sessions, the Stoxx Europe 600 Index decreased by 0.4%.

Overseas Stock Markets Higher

In the global markets, Asia stocks were decisively higher thanks to Joe Biden and Xi Jinping’s G20 side event meeting. 

There are expectations that officials in Beijing would further relax Covid restrictions in the world’s second-largest economy after dismal October industrial output and retail sales data.

As trading came to a close, the MSCI ex-Japan index for the entire region was up by 2.36%, and the Stoxx 600 for Europe finished the day up by 0.46%. 

BoE’s Testimony On Monetary Policy

The GBP/USD exchange rate had a hectic morning due to the intense attention generated by UK inflation. The Bank of England is under increased pressure to implement another significant rate hike in December as a result of the wage growth and unemployment numbers from the previous day.

In October, the annual inflation rate in the UK increased from 10.1% to 11.1%. The inflation rate that economists predict will be 10.7%. Owner-occupier housing prices are included in the Consumer Prices Index (CPIH), which increased from 8.8% to 9.6%.

The most recent figures will make the Bank of England’s appearance before the Treasury Select Committee today to discuss the November Monetary Policy Report more difficult.

The Treasury Select Committee hearing on the November Monetary Policy Report will feature testimony from BoE Governor Andrew Bailey, Ben Broadbent, Catherine Mann, and Swati Dhingra (1415 BST). 

Australia Wage Price Index

The seasonally adjusted WPI for Australia increased by 1.0% in the third quarter of 2022 and by 3.1% annually. While the public sector grew by 0.6%, the private sector expanded by 1.2%. charts An increase in the average amount of hourly compensation increases in the private sector served as the main driver of pay growth in the third quarter.

The third quarter of 2022 saw a seasonal adjustment-adjusted 1.2% increase in private sector salaries, the highest quarterly rate of pay growth since the third quarter of 2010. The annual rate of growth increased to 3.4%, the highest level seen since the fourth quarter of 2012.

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