Stocks, crypto and commodities are quiet—but another potential inflation jolt looms for investors

Good morning.

Breaking: it’s summer. That may explain why there’s very little markets action in Europe this morning, and that’s true of U.S. Futures as well. Volumes are down across the board, and the VIX volatility gauge is flashing, “nah, nothing to see here.”

But there is plenty on the calendar. Today, we get the producer price index number. It will give us another good picture of inflation after yesterday’s surprisingly ho-hum CPI print.

Speaking of ho-hum…the crypto rally is on pause this morning. Bitcoin sits around $45,000 overnight.

Let’s see what else is moving the markets.

Markets update

Asia

• The major Asia indexes are mostly lower with the Hang Seng down 0.9% in afternoon trading.
• Bad news, investors. China’s regulatory dragnet, as Bloomberg calls it, continues with a new crackdown on fintech players in the online insurance space.

Europe

• The European bourses had a snoozer of an open. 90 minutes into the trading session, the Stoxx Europe 600 was up 0.01%. That’s after the benchmark closed at yet another all-time high on Wednesday.
• Speaking of all-time highs… Siracusa, Sicily’s gem of a port city, hit an apparent record for hottest day ever recorded in Europe yesterday when the mercury soared to 48.8°C (119.84°F).
• Quiz time: which renowned mathematician was born in Siracusa, and what’s he known for? Hint: there’s a day in March dedicated to his most famous calculation.
• CORRECTION: In yesterday’s Bull Sheet, I gave you the wrong YTD number for the Stoxx Europe 600. As of yesterday’s close, it is up 18.9% YTD.

U.S.

• U.S. Futures  are a mixed picture—the Nasdaq is down, the others are flat. On Wednesday, the S&P 500 and Dow notched new record-closes.
• Investors cheered yesterday’s fairly benign CPI report that showed a possible deceleration in consumer prices. Don’t celebrate just yet, however. The U.S. Postal Service will add a special holiday-season surcharge to packages (you can thank rising shipping costs for that) and Shake Shack will hike menu prices again this year, the company now says. A reminder: inflation is in the eye of the beholder.
• Shares in Pfizer and BioNTech dropped precipitously on Wednesday following a report that their COVID-19 vaccine is much less effective against the Delta variant.

Elsewhere

• Gold is up, trading above $1,750/ounce.
• The dollar is up a touch, continuing its winning streak.
• It’s been another wobbly week for oil bulls. Crude is down with Brent around $71/barrel.
• Bitcoin is down 1.9%, trading around $45,000.

***

Buzzworthy

Inflation’s dead…

💵⚰️💵

…long live inflation

💵🏠💵

What’s really going on with consumer prices?

U.S. Bureau of Labor Statistics

A reminder: if you strip out such categories as food, energy, rent, the mortgage, tuition, car payments and subscriptions to your favorite magazine, inflation is pretty puny.

💵⛽💵

A more disturbing inflation measure

I thought it was hot last month when we were vacationing in Sicily. The temps then were in the high 90s°F. Cool, by yesterday’s standard.

🇮🇹🔥🚒

***

Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner
@BernhardWarner
[email protected]

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