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Stocks Rattled by Crypto, Earnings Woes Before CPI: Markets Wrap

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Visitors stands in front of an electronic ticker at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Monday, Nov. 30, 2020. TSE president Koichiro Miyahara will step down to accept responsibility for the all-day outage that halted trading on the world’s third-largest equity market last month. Photographer: Toru Hanai/Bloomberg
Visitors stands in front of an electronic ticker at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Monday, Nov. 30, 2020. TSE president Koichiro Miyahara will step down to accept responsibility for the all-day outage that halted trading on the world’s third-largest equity market last month. Photographer: Toru Hanai/Bloomberg

US stocks declined as renewed selling in cryptocurrencies and disappointing earnings weighed on risk sentiment ahead of a key inflation report. The dollar gained for the first time in four days. 

The S&P 500 put paid to a three-day rally, with all 11 major industry groups in the red. The tech-heavy Nasdaq 100 dropped the most among benchmarks, closing down 2.4%. Walt Disney Co. and News Corp. tumbled after posting results that fell short of expectations. Bitcoin dropped below $16,000 to a level not seen since 2020 amid a deepening selloff in cryptocurrencies as Binance walked away from its planned takeover of FTX.com. 

After midterm elections failed to deliver a Republican sweep, attention shifted toward the closely watched inflation report due Thursday for clues on the path of Federal Reserve policy tightening. 

“Elections matter, but other factors matter more for markets and the economy,” Keith Lerner, co-chief investment officer at Truist Wealth, said in a note. “The path of inflation, interest rates, monetary policy, the economy, and earnings will continue to exert the greatest influence on markets over the next year.”

Stocks Rattled by Crypto, Earnings Woes Before CPI: Markets Wrap

US inflation probably moderated slightly in October, with the consumer price index and the core measure that excludes food and energy both seen cooling on an annual basis. But with the overall annual inflation rate exceeding forecasts in six of the prior seven months, another upside surprise could dash hopes of a Fed downshift after four jumbo rate hikes.

On the election front, investors had eyed prospects of a Republican comeback in Congress, with GOP taking control of both the House of Representatives and Senate. But US voters delivered a mixed verdict, with Republicans heading for control of the House by smaller margins than forecast and the race for Senate still wide open. 

Read more on elections

GOP Closes In on Narrow House Majority, Senate Still in Play

Warnock, Walker Head to Runoff That May Decide Control of Senate

Ron DeSantis Victory Sets Him on Collision Course With Trump

California’s Slow Counting Could Delay House Control Decision

Record Number of Female Governors Win as Gender Gap Narrows

More commentary 

  • “Portfolios will assess and adjust their risk now that the ‘uncertainty’ of the U.S. mid-term elections fading,” wrote Craig Johnson, chief market technician at Piper Sandler. “Soon enough, their focus will shift back to this week’s corporate earnings results and the upcoming October CPI data.”
  • “The market is still going to fixate on inflation, which is going to stay high and sticky at least over the next couple of quarters,” Luke Barrs, global head of fundamental equity client portfolio management at Goldman Sachs Asset Management, said on Bloomberg TV.
Jim Paulsen, chief investment strategist at The Leuthold Group, discusses the factors behind his bullish call for markets and US economic growth on “Bloomberg Surveillance.”Source: Bloomberg
Jim Paulsen, chief investment strategist at The Leuthold Group, discusses the factors behind his bullish call for markets and US economic growth on “Bloomberg Surveillance.”Source: Bloomberg

Key events this week:

  • US CPI, US initial jobless claims, Thursday
  • Fed officials Lorie Logan, Esther George, Loretta Mester speak at events, Thursday
  • US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 2.1% as of 4 p.m. New York time
  • The Nasdaq 100 fell 2.4%
  • The Dow Jones Industrial Average fell 1.9%
  • The MSCI World index fell 1.6%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.6%
  • The euro fell 0.6% to $1.0011
  • The British pound fell 1.7% to $1.1349
  • The Japanese yen fell 0.6% to 146.52 per dollar

Cryptocurrencies

  • Bitcoin fell 13% to $16,216.08
  • Ether fell 13% to $1,163.86

Bonds

  • The yield on 10-year Treasuries declined two basis points to 4.11%
  • Germany’s 10-year yield declined 11 basis points to 2.17%
  • Britain’s 10-year yield declined 10 basis points to 3.46%

Commodities

  • West Texas Intermediate crude fell 3.7% to $85.58 a barrel
  • Gold futures fell 0.5% to $1,707.80 an ounce

--With assistance from , , , and .

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