US stocks mixed midday on upbeat China economic data

12.05 pm: Tesla shares drive the Nasdaq lower

US stocks were mixed in noon trading as both retail sales and industrial production in China unexpectedly climbed in October from a year earlier.

At midday, the Dow rose 12 points to 36,112, while the S&P 500 eased 3 points at 4,680 and the tech-heavy Nasdaq slipped 41 points to 15,820.    

“The surge in core inflation in October marks the start of a run of big gains, thanks to surging used auto prices, rebounding airline fares, and faster increases in housing costs,” Pantheon Macroeconomics chief economist Ian Shepherdson said.  

“We think core inflation will peak at almost 7% in March, which will pose a serious challenge to the Fed’s benign medium-term view. Chair [Jerome] Powell will have to convince markets that the combination of rocketing payrolls and soaring inflation does not threaten the transitory story, to which he appears still to be committed,” Shepherdson added.  

Tesla Inc (NASDAQ:TSLA) shares fell another 4% following a Twitter spat between its CEO Elon Musk and Senator Bernie Sanders, in which Musk suggested he’d be willing to sell even more of his shares.  

Other notable movers included shares of Dollar Tree, which climbed more than 13% following a report Friday that activist investor Mantle Ridge has invested at least $1.8 billion in the discount retailer.

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9.36am: US benchmarks on front foot Monday

US benchmarks started higher on Monday as investors await a slew of retail sales data this week, which will act as gauge for consumer sentiment.

In early deals in New York, the Dow Jones Industrial Average added around 113 points to stand at 36,213, while the  broader-based S&P 500 gained over 11 points at 4,694.

The technology company weighted Nasdaq advanced over 47 points at 15,908.

Retail sales data from the US, China, UK and Canada is all expected this week and Fawad Razaqzada, Market Analyst at ThinkMarkets, said this will mean seeing how “surging energy prices and global supply chain issues have impacted consumer spending, and what this might mean for the markets”.

“We already know US consumer sentiment hit a 10-year low, according to a University of Michigan’s closely-watched survey that was released at the back end of last week,” he said.

“With sentiment downbeat among consumers, this might be reflected in lower levels of spending in the months. We will get to see the latest retail sales data for the month of October from the US, as well as some of the other largest economies in the world. Meanwhile we will have earnings from top US retailers such as Walmart, Target and Home Depot to provide as an alternative snapshot of the health of the US consumer,” he added.

6.30am: US shares seen starting higher

US stocks are expected to start the new trading week positively on Monday, extending Friday’s rally even though last week overall showed a modest loss, snapping a five-week winning streak.

Futures for the Dow Jones Industrial Average were up 0.3% on Monday, while those for the broader S&P 500 and tech-laden Nasdaq-100 both rose 0.2%.

On Friday the Dow gained 0.6%, the S&P 500 rose 0.4%, and the Nasdaq Composite added 0.2%.

Worries over rising inflation and when the Federal Reserve might start to hike interest rates have weighed on markets recently, though major indexes are still close to record highs.

Corporate earnings will be back in focus again, with Tyson Foods (NYSE:TSN), WeWork and Warner Music Group among companies set to report quarterly results before the opening bell on Monday. Companies that have reported earnings so far this season have broadly beaten analysts’ expectations.

In pre-market trading, Dollar Tree was higher after The Wall Street Journal reported Friday that activist investor Mantle Ridge has a stake of at least $1.8 billion in the discount retailer and plans to push it to act to boost its share price.

Higher inflation has also suppressed the returns on government bonds recently, with the yield on the benchmark 10-year Treasury note slipping to 1.546% from 1.583%. 

Story by ProactiveInvestors