Wall Street creeps higher as investors await cues on tapering and inflation
Wall Street’s main indexes edged higher today but a lack of clear catalysts kept trading slow while investors awaited inflation data and an upcoming Fed meeting.
The Dow Jones Industrial Average was up 0.1 per cent, while the S&P 500 gained 0.2 per cent at the open.
Meanwhile, the tech-heavy Nasdaq rose 0.4 per cent, with tech stocks trading slightly higher as investors digested the possible impact of a global plan to increase taxes on major multinational firms.
Wall Street’s indexes have moved tepidly this week with most investors sticking to the sidelines ahead of inflation data and an upcoming Fed meeting.
The latter is expected to shed more light on the bank’s policy tapering plans.
“I think we are going to remain in a grinding pattern for a bit with investors trying to figure out if inflation is to be more persistent or more transient,” said Rob Sechan, managing partner of NewEdge Wealth.
London markets
London’s FTSE 100 edged lower today as heavyweight financials and mining stocks weighed down the index.
The blue-chip index fell 0.3 per cent this afternoon, dragged down by life insurance and non-life insurance stocks.
Base metal miners fell 0.5 per cent, while industrial stocks slipped 0.4 per cent with Experian leading the decline.
After breaking above the 7,000 mark in mid-April, the FTSE 100 has swayed in a narrow range on concerns that rapid economic growth could lead to higher inflation and faster tightening of ultra-loose monetary policies.
Meanwhile, the mid-cap FTSE 250 also dipped by 0.6 per cent, as Upper Crust owner SSP fell 1.8 per cent after it reported a hefty half year loss.
Market movers
The afternoon’s biggest winner was hotel firm Whitbread, who rose 3.2 per cent, followed by takeaway giant Just Eat, up by 2.5 per cent.
Smith & Nephew and British Airways owner IAG also rose 1.9 per cent and 1.8 per cent respectively.
Intermediate Capital Group was the afternoon’s biggest faller after its stellar Tuesday, dropping 4.1 per cent, followed by housebuilder Persimmon’s 3.5 per cent hit.
Meanwhile, miner Evraz and NatWest both dipped by 2.9 per cent and 2.8 per cent respectively.
Around the world
World stock prices held near record highs today as investors bet the Fed is some way off from tapering its economic stimulus.
MSCI’s all-country world index last stood at 716.55, after hitting an intraday high of 718.19 yesterday, led by gains in Europe.
However, Asia-Pacific shares outside Japan ticked down 0.2 per cent and the Nikkei shed 0.3 per cent.
On Wall Street yesterday, the S&P 500 was steady and hovering near its record high.
“As the recovery in the job market is contained, any discussion at the Fed on tapering is unlikely to gain momentum, even if it starts soon,” said Naokazu Koshimizu, senior rates strategist at Nomura Securities.
“So those who had bet on steepening of the yield curve are unwinding their positions while some investors are also now buying to earn carry.”