Friday, June 18

Markets tumble again as inflation concerns rattle investors Business

Good morning and welcome to our continued coverage of the world economy, financial markets, the eurozone and business.

Inflation concerns continue to plague markets today, after consumer prices in the United States rose much more than expected in April amid tight supply and rising demand as closures ease. .

News that the Consumer Price Index has risen 4.2% over the month from a year earlier fueled fears that the US economy could be running too hot.

It triggered losses on Wall Street last night and in Asia-Pacific stocks, where stocks fell for the third day in a row.

With government support packages boosting consumer spending and extended supply chains creating a scramble for raw materials, investors worry that the jump in inflation is not temporary as the Federal Reserve believes.

The Dow it fell 681 points, or 1.99%, to mark its worst session since January, a day after its biggest drop since February.

The liquidation has again spread around the world, shipping to Japan Nikkei slipping 2.5% and Australia S & P / ASX 200 almost 1%, adding to the losses earlier this week.

London is also heading for a lower start, with the FTSE 100 inclined to fall almost 1%, erasing yesterday’s slight recovery after Tuesday’s slide.


European opening calls:#FTSE 6949 -0.80%#DAX 15047 -0.68%#CAC 6234 -0.73%#AEX 687 -1.10%#MY B 24271 -0.74%#MOUNTAIN GOAT 8953 -0.61%#OMX 2182 -0.53%#STOXX 3912 -0.89%#IGOpeningCall

May 13, 2021

However, some economists point out that US inflation was driven by unique factors as the economy emerged from pandemic restrictions, so it could be a temporary spike.

The prices of used cars and trucks, shelter and lodging, airline tickets, recreational activities, insurance and automobile furniture drove the CPI higher, as the reopening of businesses created temporary quirks in the data.

Matthew C. Klein

Don’t be fooled by the inflation jump in April. It’s being driven by the reopening of quirks.

<- it's always worth digging into the data on attribution levels and tables

May 12, 2021

New US producer price data and weekly jobless claims are due today, providing a fresh perspective on how the world’s largest economy is doing.

It will take time to find out if inflation is temporary or permanent, so this issue will lurk for months.

Jim Reid from German bank predicts regular pockets of volatility as the two sides battle it out:

It’s dangerous to read too much in one issue, but the overall strength gives us confidence that this is not just a transitory story. Another buzzword for us has been how this year will be “tough” for the markets, especially once the reopening occurs. This release personifies that thought process.

There may be dull periods, but this year is going to be a great battle between the optimism of the reopening / massive stimulus, on the one hand, and the inflationary consequences, on the other. Expect regular pockets of vol. I still rely heavily on the inflation field, but the reality is that the battle is still in the early stages and non-inflationists will still be able to use the transitory argument for several more months.

Long heather

This is the best graph I have seen that clearly explains what is going on with inflation.

Yes, April saw the fastest inflation since September 2008
But those prices b / c were compared to last April.

Graphic via @andrewvandam

May 12, 2021

Bitcoin took a turn overnight, after Elon Musk announced in a tweet that Tesla was suspending vehicle purchases with Bitcoin, citing the environmental impact of mining the cryptocurrency.

Elon musk
(@Elon Musk)

Tesla and Bitcoin

May 12, 2021

Musk added that Tesla would not sell any of the bitcoins it bought earlier this year and intends to use bitcoins for transactions as soon as mining uses more sustainable energy.

This took bitcoin down, from over $ 54,000 just before Musk’s tweet to less than $ 46,000. It has recovered a bit since then, to around $ 51,000, but it is still down more than 10% in the last 24 hours.

Other cryptocurrencies also slipped, including ether and dogecoin:

May 13, 2021

The agenda

  • 1.30pm BST: Weekly US Unemployment Job Application Figures.
  • 1.30pm BST: April US Producer Price Inflation Report

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