Nasdaq is down 1.3%, while the stock market is slipping due to rising bond yields and inflation

A separate report on industrial output from the Federal Reserve showed a 0.9% increase in January, also rejecting economists’ predictions of a 0.5% increase. Businesses replenished inventories more than expected in December, but confidence in homebuilders was stronger than expected.

However, the producer price index jumped 1.3% in January, the largest increase since the index was radically revised in 2009 and service prices were included in the report. The wholesale inflation rate over the past 12 months rose from 0.8% at the end of 2020 to 1.7%, not far from the pre-pandemic level of 2%.

The data is helping to boost US bond yields as investors also look forward to the prospect of more fiscal stimulus from Congress and declining coronavirus cases. On Tuesday, the 10 Treasury has TMUBMUSD10Y,
1.284%
achieved a return of nearly 1.30%, its highest level since Feb. 26, according to Dow Jones Market Data.

“The retail sales were amazing, and the PPI was also very strong, but we were several months behind,” said Peter Andersen, founder of Boston-based Andersen Capital Management. “It’s just too difficult to extrapolate based on one month. It may show pent-up demand, but the dynamics of supply demand are currently too difficult to filter. I think it can show what the pent-up demand is once we get through the introduction of the vaccine. We go to the races. “

In an interview with MarketWatch, Andersen called himself “really shocked by the attention investors are paying to shiny items like Bitcoin, space exploration, SPACs”. The market could use a bit of direction from more news on vaccine progress, he said, but overall, apart from a few frothy areas, it’s not a concern.

“Markets are showing small losses today as mild concerns about rising government bond yields have encouraged some traders to reduce their exposure to equities,” said David Madden, market analyst at CMC Markets UK.

“Lately, the mood in global equity markets has been very optimistic as multi-year highs and in some cases record highs have been reached,” Madden wrote. “Buying was fueled by hopes for more stimulus spending by the Biden government, and also capitalized on the mix that successful vaccine rollouts should help reopen economies, and in turn, economic activity will increase later this year,” Referring to President Joe Biden’s $ 1.9 trillion COVID support proposal.

Meanwhile, icy weather is causing problems in much of the US, including Texas, leaving millions without power and snowing nearly 75% of the Lower 48 states, The Wall Street Journal wrote, citing the National Oceanic and Atmospheric Administration’s National Snow Analysis daily report. Freezing weather reduced oil production in the US and helped drive prices up.

In other economic reports, investors will look to minutes of the Federal Reserve’s policy meeting in January released at 2 p.m. and further indications of how the central bank will respond to economic improvement thanks to higher fiscal spending and effective vaccine rollouts.

Among the Fed speakers on tap today, Thomas Barkin, the president of the Federal Reserve Bank of Richmond, would speak at 9 a.m., Boston Fed president Eric Rosengren would speak an hour later, and the president of the Dallas Fed, Robert Kaplan, was due to speak later Wednesday after 6pm.

See: Flight into major cities sparked soaring suburban housing prices – Will it last longer than the pandemic?

Which stocks have the focus?

• Shares of Verizon Communications Inc. VZ rose 3.7%, and Chevron Corp. CVX rose 3.2% to accelerate the Dow after Warren Buffett’s Berkshire Hathaway Inc. BRK.B had disclosed that it had acquired significant stakes in the companies during the fourth quarter.

• Canadian cannabis company Sundial Growers IncSNDL filed a shelf registration with the Securities and Exchange Commission to issue up to $ 1 billion in securities over time. Shares fell more than 15% in early trading.

• Manufacturer of medical equipment Medtronic PLC MDT said Wednesday it is voluntarily recalling the unused Valiant Navion thoracic stent-graft system and is informing physicians to immediately stop using the device until further notice. The shares are down 1.4%.

• Energy transfer LP ET announced a purchase agreement on Wednesday Enable Midstream Partners LP ENBL in a stock transaction worth $ 7.2 billion.

• Shares of Hilton Worldwide Holdings Inc. HLT fell 1.1% on Wednesday after the hotel operator reported a surprising fourth-quarter loss and revenue declining more than expected, as the increase in COVID-19 cases and tightening travel restrictions fuel the positive momentum of the summer and fall disrupted.

• From Shopify Inc.
  STORE,
  -7.39%
  equities fell 5.7% despite better than expected quarterly results.

What do other assets do?

• The return of the 10-year treasury TMUBMUSD10Y,
  1.284%
  decreased by almost 3 basis points to 1.289%. Yields and bond prices move in opposite directions.

• The ICE US Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.5%.

• Oil futures increased slightly as energy disruptions persisted across the country, with the US benchmark CL.1,
  + 0.50%
  Up 0.2% to USD 60.20 a barrel, past the key USD 60 level. Gold futures GC00,
  -1.42%
  fell 1.2% to about $ 1,778.20 as bond yields rose sharply.

• The pan-European Stoxx 600 index SXXP fell 0.4% and the London FTSE 100 stock index UKX fell 0.2%.

• Hong Kong markets HSI,
  + 1.10%
  closed 1.1% higher, while Japan’s Nikkei 225 index NIK lost 0.6%.

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