US Stocks Fall as Inflation Holds Pace

MARKET WRAP 

Market Wrap: Stocks, Bonds, Commodities

On Thursday, U.S. stocks closed lower as inflation held its pace. The Dow Jones Industrial Average fell 173 points (-0.51%) to 33,631, the S&P 500 dropped 27 points (-0.62%) to 4,349, and the Nasdaq 100 was down 57 points (-0.37%) to 15,184.

U.S. data showed that consumer price growth remained stable at 3.7% on year in September (as expected), while core inflation rate slowed to 4.1% on year (as expected).

Meanwhile, the latest number of initial jobless claims was steady at 209,000 (vs 208,000 expected).

The U.S. 10-year Treasury yield jumped 14.7 basis points to 4.705%.

Food, beverage & tobacco (-2.52%), consumer durables & apparel (-2.18%), and telecoms services (-1.80%) stock sectors lost the most.

Ford Motor (F) fell 2.04% as the United Auto Workers (UAW) called a strike at the company's plant in Kentucky state. 

Microsoft (MSFT) dipped 0.38%. The software giant said U.S. tax authorities are seeking from the company an additional tax payment of $28.9 billion plus penalties and interest.

Delta Air Lines (DAL) fell 2.31%, American Airlines (AAL) slid 3.37%, and United Airlines (UAL) was down 2.88%. 

Infosys (INFY) sank 6.53%. The information technology company slashed its annual sales growth forecast.

Beyond Meat (BYND) dropped 5.88% after being downgraded to “underperform” at Mizuho Securities.

Carvana (CVNA) plunged 10.56% as the stock was downgraded to “neutral” at Exane BNP Paribas.

In Europe, The DAX 40 fell 0.23%, the CAC 40 declined 0.37%, while the FTSE 100 gained 0.32%.

U.S. WTI crude futures eased $0.60 to $82.91 a barrel. The U.S. Department of Energy reported an addition of 1.02 million barrels in crude-oil stockpiles (vs +0.49 million barrels expected).

Gold price was flat at $1,868 an ounce.

Market Wrap: Forex

The U.S. dollar rebounded along with Treasury yields. The dollar index climbed back to 106.57.

EUR/USD fell 92 pips to 1.0528.

USD/JPY gained 63 pips to 149.80.

GBP/USD slid 138 pips to 1.2175. U.K. data showed that gross domestic product grew 0.2% on month in August (vs +0.1 expected), while industrial production declined 0.7% on month (vs -0.2% expected).

AUD/USD sank 101 pips to 0.6313.

USD/CHF rose 66 pips to 0.9086, and USD/CAD added 99 pips to 1.3692.

Bitcoin was little changed at $26,740.

Dow Jones (CME)‎ (Z3)‎ Intraday: bullish bias above 33670.00.

Pivot:

33670.00

Our preference:

Long positions above 33670.00 with targets at 33910.00 & 34000.00 in extension.

Alternative scenario:

Below 33670.00 look for further downside with 33550.00 & 33390.00 as targets.

Comment:

The next resistances are at 33910.00 and then at 34000.00.

EUR/USD Intraday: key resistance at 1.0565.

Pivot:

1.0565

Our preference:

Short positions below 1.0565 with targets at 1.0510 & 1.0490 in extension.

Alternative scenario:

Above 1.0565 look for further upside with 1.0590 & 1.0615 as targets.

Comment:

As long as the resistance at 1.0565 is not surpassed, the risk of a break below 1.0510 remains high.