October's PPI falls to its biggest monthly drop since April 2020

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Stocks rise on Wednesday, building on the strong rally from the previous session, on the back of more encouraging inflation data.

The S&P 500 climbs 0.3%, while the Nasdaq Composite adds 0.2%. The Dow Jones Industrial Average trades 202 points higher, or 0.6%.

After tumbling 18 basis points on Tuesday, the yield on the benchmark 10-year U.S. Treasury climbed more than 9 basis points in Wednesday’s trading session.

October’s producer price index, which measures wholesale prices, fell by 0.5%to mark its biggest monthly drop since April 2020. Not all of the economic data was positive, however, since retail sales also declined.

Wall Street is coming off a strong session in which the S&P 500 and Nasdaq had their best day since April. Those gains came after the consumer price index remained flat for October, while a Dow Jones consensus expected a slight gain.

In corporate news, Target popped 18% on better-than-expected results for the third quarter. Shares of apparel company VF added 15% following a JPMorgan upgrade to neutral from underweight.

Shares of auto parts manufacturer, Holley, added 5.6% following an upgrade by Jefferies to buy from hold. The investment bank predicts Holley’s sales will ramp up in the fourth quarter and thinks the stock is trading at a significant discount to historical averages.

Wall Street also had its eyes on Washington as lawmakers tried to avoid a government shutdown. Late Tuesday, the House of Representatives passed a bill to avert a government shutdown. The measure will go to the Senate for a vote. If cleared by lawmakers, the legislation goes to President Joe Biden. Without a funding bill, the federal government is slated to shut down at the end of the week.

All eyes are on this morning’s highly anticipated meeting between US President Joe Biden and China’s Xi Jinping - the first in over a year.

In US sector news, Consumer Staples is performing the best, whilst Emergy is currently the worst performing sector


One Australian dollar at 7:45 AM was buying 65.06 US cents.

Figures around the globe

European markets closed higher. London’s FTSE added 0.62 per cent, Frankfurt gained 0.86 per cent, and Paris closed 0.33 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei gained 2.52 per cent, Hong Kong’s Hang Seng jumped 3.92 per cent while China’s Shanghai Composite closed 0.55 per cent higher.

The Australian share market closed 1.42 per cent higher at 7106.

ANZ Group Holdings (ASX:ANZ) is paying 94 cents 56 per cent franked
Bisalloy Steel (ASX:BIS) is paying 10.5 cents fully franked
Copper Strike (ASX:CSE) is paying 2.2346 cents fully franked
Orica (ASX:ORI) is paying 25 cents unfranked

Dividends payable
Bank of Queensland (ASX:BOQ)
InvoCare Ltd (ASX:IVC)
Myer Holdings (ASX:MYR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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