Tech Sell-Off Set to Continue
US futures were lower on Tuesday, as the tech sell-off continues on concerns that rising commodity prices and supply chain issues could drive up inflation and interest rates and erode the value of future earnings. Nasdaq futures were the worst performers, falling more than 1%. Traders also await fresh CPI and PPI data for the US to be released Wednesday and Thursday respectively. Figures published Monday showed American consumers expect inflation at 3.4%, the highest level since September 2013. Meanwhile, several Fed officials are due to speak today. On Monday, the Dow Jones lost 35 points or 0.1% to 34,743. The Nasdaq shed 350 points or 2.6% to 13,402 and the S&P 500 fell 44 points or 1% to 4,188. .
Heating Oil Hovers at 5-Month High
Heating oil traded around $2 per gallon, its highest level since December 2019, on prospects that demand will rebound further in the second half of the year as vaccination rollout gathers pace. Operations at the Colonial Pipeline are expected to restart at the end of the week, after a ransomware cyberattack last Friday forced a temporary shutdown. This pipeline is the source of nearly half of the US East Coast’s fuel supply, transporting 2.5 million barrels per day of gasoline and other fuels. Meantime, the latest EIA Petroleum Status Report showed US heating oil inventories fell for the second consecutive week in the April 30th week.
Gasoline Pulls Back
Gasoline futures traded below $2.12 per gallon, after hitting a 3-year high above $2.2 on Monday, after the Colonial Pipeline said it aims to resume full operations by the end of this week, which led some US Gulf Coast refiners to cut output. At the end of last week, a ransomware attack forced the temporary shutdown of the Colonial Pipeline, the US’s largest conduit for refined products, and the source of nearly half of the US East Coast’s fuel supply, transporting 2.5 million barrels per day of gasoline and other fuels. The attack comes just as the nation’s energy industry is preparing to meet stronger fuel demand from summer travel.
Turkey Current Account Gap Narrows in March
The current account deficit in Turkey shrank to USD 3.33 billion in March of 2021 from USD 5.45 billion a year earlier and compared with market consensus of a USD 3.8 billion gap. The goods shortfall fell to USD 2.96 billion from USD 4.36 billion a year earlier and the services surplus rose to USD 0.77 billion from USD 0.39 billion, amid higher tourism revenues. Meantime, the primary income gap narrowed to USD 1.18 billion from USD 1.21 billion, while the secondary income account shifted to a surplus of USD 47 million compared to a deficit of USD 280 million.
London Stocks Plunge 2%
The FTSE 100 tumbled more than 2% Tuesday from Monday’s near 14-month high, with banks, travel & leisure and miners leading the losses, on renewed anxiety over the prospects of higher inflation. Economic data showing China’s consumer prices rose in April by the most in seven months and factory gate prices increased at the fastest rate in three and a half years, while Germany’s wholesale price inflation hit a decade high. Meanwhile, investors await UK first-quarter GDP data due tomorrow, as well as US CPI, which is expected to show a 3.6% rise year-on-year. Traders will also keep a close eye on the Queen’s Speech, which marks the official opening of Parliament while the government will set out its legislative agenda.