Stocks Rebound While Crude Oil Hovers Near $81: Markets Wrap

Stocks rebounded on speculation that inflation pressures — largely fueled by a jump in energy costs — will be transitory and won’t derail the economic rebound. Oil rallied.

The S&P 500 erased losses, led by commodity and financial shares. West Texas Intermediate crude climbed to a seven-year high and China’s coal futures hit a record. Aluminum jumped to the highest since July 2008 as a deepening power crisis is squeezing supplies of the energy-intensive metal that’s used in everything from beer cans to iPhones. The cash Treasury market is closed for a holiday. The dollar fluctuated.

Jitters over surging prices and concerns that the post-pandemic recovery is now past its peak dragged the U.S. equity benchmark 5% below its September record last week. Persistent supply bottlenecks have also raised doubts about whether stock valuations can be stretched any further. While stagflation fears may be rising, strategists at some of Wall Street’s biggest banks say it’s a good time to buy the dip in stocks.

“The surge in energy prices will slow growth, but in our view is not sufficient to cause recession,” UBS Global Wealth Management strategists led by Mark Haefele wrote in a note to clients. “Energy prices are likely to stabilize or moderate through next year.”

Here are a few events to watch this week:

Bank of Korea policy decision and briefing Tuesday
Atlanta Fed President Raphael Bostic speaks on inflation Tuesday
U.S. FOMC minutes and CPI Wednesday
China PPI, CPI Thursday
U.S. initial jobless claims, PPI Thursday

Stocks

The S&P 500 rose 0.2% as of 9:50 a.m. New York time
The Dow Jones Industrial Average rose 0.2%
The Stoxx Europe 600 fell 0.2%
The MSCI World index rose 0.3%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1577
The British pound rose 0.2% to $1.3643
The Japanese yen fell 0.8% to 113.15 per dollar

Bonds

Germany’s 10-year yield advanced three basis points to -0.12%
Britain’s 10-year yield advanced three basis points to 1.19%

Commodities

West Texas Intermediate crude rose 2.6% to $81.42 a barrel
Gold futures were little changed

Source

Vladimir Ribakov

Following 11+ years of trading experience, trading my own accounts as well as for hedge funds and brokerages, I have decided to fulfill my destiny and to personally mentor Forex and Commodities traders. When I released the “Broker Nightmare” (software that hides trades from brokers) 8 years ago, I found an overwhelming number of frustrated people who genuinely wanted to learn how to trade the Forex market, but instead found themselves scammed and misled. Over the years I have also release other trading systems based on my trading strategies, and met a lot of people on my worldwide Forex seminars. We’ve formed a close Forex community and we meet once or twice a year in various locations in Europe.