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Wall Street Opens Lower but Steadies After CPI Shock; Dow Down 50 Pts

Stock MarketsJul 13, 2021 09:36AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened moderately lower on Tuesday but were comfortably off the premarket lows that they hit in response another set of stronger-than-expected inflation data.

By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was down 44 points, or 0.1%, at 34,842 points. The S&P 500 was down 0.2%, while the Nasdaq Composite was down less than 0.1%.

The annual rate of consumer inflation rose to 5.4% in June, defying expectations for a decline to 4.9%. The monthly rises in both the consumer price index and its narrower, ‘core’ definition also both outstripped expectations.

The data revived fears that the Federal Reserve will soon start to withdraw the monetary stimulus that has driven the rally of the last 18 months. 

Earlier on Tuesday, The Wall Street Journal had published an interview with St. Louis Fed President James Bullard, in which Bullard said the time was already right for reducing the Fed’s asset purchases, which are currently running at $120 billion a month. Two of his colleagues on the Federal Open Markets Committee had argued the opposite over the last four days, and many analysts remain persuaded that the spike in prices is essentially transitory, distorted by factors such as the used car market and last year's collapse in energy prices.

The number was "warmer than expected, but we knew risks were tilted to upside," said Oxford Economics analyst Greg Daco via Twitter. He added that the May number "represents peak inflation". 

Others argued that the increase in prices appeared more broad-based than in the past.

"Apparel prices are jumping as consumers snap up everything that comes in," said Diane Swonk of Grant Thornton. "Makeup is also in short supply. Masks are off and lipstick is on."

The second-quarter earnings season got off to a mixed start, with JPMorgan (NYSE:JPM) stock falling 1.2% on concerns that its headline profit figure was flattered by the release of reserves made earlier in the pandemic. Goldman Sachs (NYSE:GS) stock, by contrast, rose 0.8% after riding a wave of merger and acquisition activity in the quarter, which offset a decline in trading revenue.  PepsiCo (NASDAQ:PEP) stock rose 1.9% to a new record high after it raised its guidance for earnings growth in the current fiscal year to 11% from below 10% previously.

Also reporting were ConAgra Foods (NYSE:CAG), whose stock fell 2.2% after it warned of higher input price inflation, and construction goods company Fastenal (NASDAQ:FAST), which fell 2.2% after falling short of expectations.

Alphabet (NASDAQ:GOOGL)stock rose 0.2%, shrugging off overnight news that it had been fined nearly $600 million in France for failing to compensate publishers for carrying their news. The fine follows a similar action against Facebook (NASDAQ:FB) by Australia earlier this year that ended with the social media giant agreeing to pay publishers substantial fees in future.

Elsewhere, Boeing (NYSE:BA) stock fell 3.3% after reports of fresh problems with its 787 Dreamliner project that threaten to push back its timeline for delivering wide-bodied jet beyond its airline clients' summer peak season. Nokia ADRs (NYSE:NOK) meanwhile rose 7.8% to its highest in over two years after the maker of network equipment provided fresh evidence of a turnaround under CEO Pekka Lundmark.

Wall Street Opens Lower but Steadies After CPI Shock; Dow Down 50 Pts
 

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Comments (13)
Ferdinando Riboni
Ferdinando Riboni Jul 13, 2021 2:38PM ET
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media says Biden has this covered..who do you trust more Chinese sponsored media or American sponsored media guess who won.?
Jokers R Us
Jokers R Us Jul 13, 2021 2:02PM ET
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And yet gold is flat
cedrik marchand
cedrik marchand Jul 13, 2021 1:26PM ET
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different week same story
israel aji
israel aji Jul 13, 2021 12:57PM ET
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It imperative to always stick to the rule never enter a trade an hour earlier before and after a major news. was playing with demo but of course I got caught by the news.
Mitchel Pioneer
Mitchel Pioneer Jul 13, 2021 12:44PM ET
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"FED expected inflation reading, high prices won't last"....What a joke...
Jouni Matero
Jouni Jul 13, 2021 12:44PM ET
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Funny thing is that if they expected inflation, why was the number much, MUCH higher than expected. Probably they expected it to be much higher than expected lol.
Mitchel Pioneer
Mitchel Pioneer Jul 13, 2021 11:11AM ET
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10AM sharp, and the S&P magically goes green.  Why doesn't it go red at 10AM during "rallies?"  Fraudulent, criminally manipulated JOKE.
Paul Richard
Paul Richard Jul 13, 2021 11:11AM ET
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how much you losing on your shorts?
Dave Jones
Dave Jones Jul 13, 2021 11:11AM ET
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I don't think he's got skin in the game he just tells it like it is...USA is bankrupt and inflation is a slow default. They will make the currency worthless meanwhile protecting the elite. Assume the position America!
John Klan
John Klan Jul 13, 2021 11:11AM ET
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that's around the time European markets close so they turn their attention to the U.S. markets.
ben sc
ben sc Jul 13, 2021 11:01AM ET
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Anyone's wages go up 5.4% last month?
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Ronald Warren
Ronald Warren Jul 13, 2021 11:01AM ET
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jason xx Sir! Tread with caution or you might be desiring to swan dive from the 14th floor! Easy money is not sure money!!
John Snowden
John Snowden Jul 13, 2021 11:01AM ET
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as a top contributor i got 3%, or -2.4%. thanks FED!
John Snowden
John Snowden Jul 13, 2021 11:01AM ET
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jason xx i thought the same thing in 2007. was just about to quit my job too...
Stan Smith
Stan Smith Jul 13, 2021 11:01AM ET
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Mine have been frozen since last year...so government gets to rob me even more
Jokers R Us
Jokers R Us Jul 13, 2021 11:01AM ET
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No and thats the point
Stan Smith
Stan Smith Jul 13, 2021 10:42AM ET
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Inflation is baked in :D
Jouni Matero
Jouni Jul 13, 2021 10:42AM ET
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All possible losses, inflation, wars, climate change, catastrophies, pandemic, etc all baked in but one is not: possible increased revenue and gains. Not manipulated market? Lol. JP and his gang really sc rwd it up this time.
Scott Clem
Scott Clem Jul 13, 2021 10:34AM ET
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So let's get this straight, we have another record month of devaluing the dollar, and this creates more demand for the dollar and less demand for metals that actually maintain their purchasing power? Welcome to the new Amerika.
ben sc
ben sc Jul 13, 2021 10:19AM ET
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it's just transitory they say, it's not going to last. Just another month of increasing inflation nothing to see here....
Stan Smith
Stan Smith Jul 13, 2021 9:58AM ET
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How did it steady. Any useful answers Geoff?
Mitchel Pioneer
Mitchel Pioneer Jul 13, 2021 9:54AM ET
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Further evidence of just how much of a criminally manipulated joke this market truly is.  400 point, uninterrupted "rallies" on nothing, yet the US Ponzi Scheme holds the line after the CPI report.  I guess that was already "priced in" to the greatest financial fraud in history.  Of course, upcoming earnings that "beat" the criminally rigged "estimate" won't be priced in.  Assume the proper position America.
Tiberius Augustus
Tiberius Augustus Jul 13, 2021 9:54AM ET
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They fit the narrative to whatever they want
jason xx
jason xx Jul 13, 2021 9:54AM ET
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Somebody's mad they got margin called on thier failed short positions
Jouni Matero
Jouni Jul 13, 2021 9:40AM ET
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Stocks are famously "shrugged off" in five minutes while any positive news boosts market like two days. Stop the manipulation FED!!
Hll lll
Hll lll Jul 13, 2021 9:40AM ET
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Manipulation is the name of the game
Larry DeAngelis
Larry DeAngelis Jul 13, 2021 9:40AM ET
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Crude oil runs the show. Market is up if crude is up. Joke!
taylor jason
taylor jason Jul 13, 2021 9:40AM ET
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those who cry manipulation seldomly actually understand the bigger picture
Larry DeAngelis
Larry DeAngelis Jul 13, 2021 9:40AM ET
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Actually we get the bigger picture but would prefer to trade Free Markets where the price is allowed to find it's fair value.
jason xx
jason xx Jul 13, 2021 9:40AM ET
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I wonder if these same people were crying about manipulation during the 700 plus day rally from 2016-2018? somehow I doubt it
 
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