US consumer prices rose at their fastest pace since 1982 in Dec, hitting an annualized 7% from Nov’s 6.8%, the Labor Department reported on Wed. Apparently financial markets were ready for a hot inflation number. The 10-year US Treasury yield initially dipped on the inflation data, before finishing a fraction higher at 1.7428%. US equities finished mostly higher.
The Dow Jones Industrial Average gained 38.30 pts, or 0.11%, to close at 36,290.32. The broader S&P 500 index rose 0.39%. The tech-heavy Nasdaq Composite advanced 0.23%. The small cap Russell 2000 dropped 0.48%.
Electric-vehicle maker Tesla (TSLA US, +3.93%) and Google’s parent Alphabet (GOOGL US, +1.21%) paced a rally in megacaps. Tesla’s new Gigafactory in Texas appears ready to start production in a matter of days.
Stocks tied to economic growth were strong performers including fertilizer company Mosaic (MOS US, +3.8%), miner Freeport-McMoRan (FCX US, +5%) and forestry company West Fraser Timber (WFG CN, +4.3%).
Goldman Sachs (GS US, -3.16%) will be the first major financial firm to announce 4Q2021 earnings when it reports on Fri. The shares of Goldman and other investment banks weakened on Wed, after smaller rival, Jefferies (JEFF US, -9.27%) said its 4Q fixed-income trading revenue plunged 50% yoy.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, fell 0.66% to 94.993. The DXY is back down to where it was in early Nov 2021.
The most actively traded US gold futures (Feb) contracts settled up $8.60, or 0.5%, at US$1,827.30/oz. March silver, which is the most actively traded silver futures, rose 39.5 cents, or 1.7%, to end at US$23.207/oz.
The front-month WTI futures closed up $1.42 at US$82.64/bbl, after an EIAreport showed US crude inventories plummeting by 4.55m barrels last week to their lowest since Oct 2018. Brent futures closed up $1.02 at US$84.74/bbl. US natural gas futures surged more than 14% on Wed, as temperatures dropped.
Benchmark three-month nickel on the LME was up 5% at $21,430, its loftiest since touching US$21,850 in Feb 2012, according to Reuters. Indonesia may impose an export tax on some nickel products as soon as this year as part of its shift away from shipping raw materials.