Inflation data and the start of third-quarter earnings season on Wall Street will put more pressure on nervous markets later today.
Apple shares will also be closely monitored after it was reported that it is unlikely to meet near-term production targets for its new iPhone due to global electronic chip shortages.
In London, the focus will be on Hutt Group shares after falling yesterday in the wake of a presentation to Citi investors by founder and chief executive Matt Moulding. The company issued a statement today saying it has no explanation for the 35 per cent drop.
Chip shortage at Apple’s target
Apple shares were down more than 1% in after-hours trading on Wall Street last night after Businesshala reported that the company plans to revise its iPhone13 production target for 2021 to 10 million units.
The new figure of 80 million reflects global electronic chip shortages as Apple’s suppliers struggle to meet demand. Apple launched four new iPhone models last month.
However, chief executive Tim Cook warned over the summer that supply chain disruptions were likely to have a bigger impact on the company in the current quarter than before.
Steady start for FTSE 100
Panic over the start of Wall Street’s third-quarter earnings season and the release of US inflation data later today mean London investors are poised to stay on edge.
The consumer price number will be used by the Federal Reserve at its next policy meeting in three weeks’ time, when it may announce a reduction in asset purchases.
Although the inflation figure for September is already slightly behind, Deutsche Bank noted that West Texas oil prices are up 7.5% so far in October.
Brent crude today held a three-year high at $83.50 a barrel, while WTI crude futures in the US also edged lower at $80.62.
Ahead of US inflation and JPMorgan Chase’s third-quarter results today, the S&P 500 closed slightly lower in New York as investors waited for the next catalyst. Defensive sectors such as real estate and utilities provided the best performance.
Markets in Asia were helped overnight by trade numbers in China, which were slightly better than expected given factory power outages and a spike in Covid-19 cases. Exports grew 28% year-on-year to a record $305 billion, better than the 25.6 per cent growth in August.
Meanwhile, the FTSE 100 index is headed to open unchanged at 7130, although this may be only a slight respite amid rising prices and the prospect of higher interest rates.
Jeffrey Haley, senior market analyst at Oanda, said: “With equities so heavily priced toward a linear pandemic recovery, and with the Fed likely to take back the easy money punch bowl, we’re looking at equity markets for a lot more two- Side volatility can be expected. In Q4.”