By Geoffrey Smith
Investing.com -- The dollar surged to a 16-month high as the highest inflation in 30 years in the U.S. prompted bets on higher interest rates. The same move also took the edge off the oil market, which awaits OPEC's monthly report. Elon Musk appears to be done selling Tesla (NASDAQ:TSLA) shares for the present, and AMC Entertainment (NYSE:AMC)'s Adam Aron also cashed out big time at the start of the week. Stocks are set to recover from Wednesday's losses though - despite a disappointing update from Disney late on Wednesday. And the first lockdown of the winter in western Europe may be announced this week. Here's what you need to know in financial markets on Thursday, 11th November.
1. Dollar surges on rate hike bets after inflation data
Inflation fears returned to haunt global markets after data showing the U.S. consumer price index rising at its fastest level in three decades.
The 10-Year benchmark Treasury yield rose 10 basis points on Wednesday in response to the numbers, which showed a broad-based and faster-than-expected rise in prices and undermined a subsequent auction of 30-year debt.
The dollar index, meanwhile, rose to its highest since June 2020, as markets anticipated a first rise in U.S. interest rates well ahead of the Federal Reserve’s current guidance.
The bond market is closed Thursday for the Veterans Day holiday, but there will be central bank action elsewhere, with Mexico and Peru both tipped to raise interest rates.
2. Musk, Aron cash out
Elon Musk has completed around one-third of the stake sale he indicated was likely on Sunday, according to SEC filings.
The filings show that Musk sold around 4.5 million shares over the course of three days, somewhat more than the shares he acquired through exercising options previously awarded as compensation.
Musk had set up the plan for exercising his options and disposing of his shares on Sept. 14, before his attention-grabbing Twitter (NYSE:TWTR) poll at the weekend.
Musk wasn’t the only CEO cashing out on Wednesday: AMC Entertainment's (NYSE:AMC) Adam Aron also filed to some $53 million of stock, days after the movie theater chain reported disappointing revenue and earnings for the third quarter. Around half of that has been executed already.
Tesla stock was up 2.5% in premarket, as the market digested the short-term supply shock.
3. Stocks set to open with a bounce; Disney struggles with streaming saturation
U.S. stocks are set to open higher later, bouncing back from their inflation-driven losses on Wednesday.
By 6:20 AM ET (1120 GMT), Dow Jones futures were up 47 points, or 0.1%, while S&P 500 futures rose 0..4% and Nasdaq 100 futures rose 0.6%.
Stocks likely to be in focus later will include Rivian (NASDAQ:RIVN), which surged by nearly 30% on its market debut to finish the day with a market value of $85.9 billion.
Also in focus will be Disney, which slumped in premarket after reporting a sharp slowdown in subscriber growth at its Disney+ service, overshadowing improved performances from its movie and theme park divisions.
4. Lockdowns return to Europe
Europe is starting to tighten its public health measures again as the seasonal increase in Covid-19 cases and hospital admissions worsens.
The Dutch government is set to take a decision on Friday on a raft of measures recommended by its scientific advisory board, including the cancellation of events, closing theaters and cinemas, and curfews for cafes and restaurants. Schools, however, would remain open.
The Netherlands’ 7-day infection rate is back at the record high of last winter, while in neighboring Germany, new infections topped 50,000 for the first time ever on Wednesday and deaths rose to their highest since April. The recent decline in new infections in Britain also reversed sharply on Wednesday.
5. Dollar strength hits oil prices; OPEC monthly report due
Crude oil prices weakened overnight as the rise in the dollar hit various commodities whose prices are generally quoted in dollars.
By 6:30 AM ET, U.S. crude futures were down 0.7% at $80.78 a barrel, while Brent futures were down 0.5% at $82.25 a barrel.
The move was also influenced at the margins by an unwinding of tension in European natural gas markets, as Russia started to ship extra volumes to western and central Europe through its land-based pipelines. That relief might not last long, however: Belarusian President Alexander Lukashenko threatened to stop gas flows through the Yamal-Europe pipeline if the EU proceeds with sanctions against his regime, which has allowed thousands of migrants to seek illegal entry to the EU via its border with Poland and Lithuania.
The Organization of Petroleum Exporting Countries will update its forecasts for global supply and demand in its monthly report later.