Geoffrey Smith 

Investing.com — U.S. released September consumer inflation data, one day after Raphael Bostic of the Atlanta Fed stated that inflation pressures may not be as “transitory” as they had hoped. Apple (NASDAQ.) is now reporting that its flagship iPhones are being cut due to shortages of chips. China saw its exports rise by 28% in the past year. However, the Eurozone experienced a drop in industrial production due to unknown reasons. JPMorgan (NYSE.) and Blackrock(NYSE.) begin the third quarter earnings season. Meanwhile, the American Petroleum Institute releases weekly U.S. inventories data for crude oil. Vladimir Putin, the European savior against gas shortages is redefining himself. This is what you should know about financial markets Wednesday 13 October.

1. Bostic grabs ‘transitory inflation narrative’ CPI data

U.S. inflation data September 2009 will be published at 8:30 AM ET. Markets are increasingly worried about how quickly prices will rise and how long it will remain elevated.

Core prices will have increased 4.0% and the Consumer price index will have grown 5.3% over a previous year. It would be no difference for August.  Grumblings from the Federal Reserve’s inflation hawks got louder on Tuesday as Atlanta Fed President Raphael Bostic said that ‘transitory’ – Fed chairman Jerome Powell’s favorite epithet for inflation this year – is turning into “a dirty word.”

In the United States, other macro-events have been positive in the past 24 hours. The announcement by Covid-19 that restrictions on crossing borders with Canada or Mexico are being relaxed and the House of Representatives has completed the formalities of delaying the reckoning regarding the debt limit.

2. Apple is reported to have had to reduce iPhone production.

Bostic’s warning that the supply chain disruptions that have driven inflation this year will be around for some time yet got support in near-real time, after Bloomberg reported that Apple is preparing to cut production of its new iPhone 13 models by over 10% due to component shortages.

Broadcom (NASDAQ) and Texas Instruments were cited as having problems in supplying the required quantity of chips.

On the same theme, Eurozone industrial production fell 1.6% in August to below its pre-pandemic level as the region’s carmakers were especially hard hit by chip shortages.  The problems didn’t stop China’s export industry responding to global demand that is still supercharged by stimulus policies. Chinese exports increased 28% over the past year in August. This was despite expectations that they would slow down to 21.6%.

3. JPMorgan and Blackrock start earnings season, stocks remain steady

JPMorgan and investment giant Blackrock kick off the third-quarter earnings season, at a time when  the stock market is struggling with its biggest pull-back in months amid concerns about the withdrawal of stimulus by the Federal Reserve.

Blackrock’s expectations of earnings were exceeded by approximately 10% due to inflows which drove stock prices to record highs in August. Delta Air Lines (NYSE 🙂 First Republic Bank Reports on (NYSE:) will also be available.

After earnings updates, two sectors showed signs of strength overnight: SAP, a software company, and LVMH, a luxury French firm.

At 6:30 am ET, the stock market was up 47 points or 0.1%. Meanwhile, they were up 0.2%, and up 0.5%. These three days, all of them have been in decline so far this week.

4. Vlad to the ‘rescue’  as energy crisis sends zinc higher

Vladimir Putin, who is scheduled to give a speech at an energy conference to offer a new overture for Europe about gas supplies, will be making a statement.

Earlier Wednesday, newswires quoted Russia’s deputy energy minister as saying that the country will complete preparations for its own winter heating season on November 1.  The next step will be to export more gas to Europe.

Some will find it too late, though. Nyrstar Metals Specialist said it would shut down three European metal smelters earlier because of higher energy costs. Nyrstar being one of the few zinc producers in Europe, London zinc futures rose 3.7% to an all-time high of 3 years.

5. API data is due. IEA warns investors about oil’s ease; Oil prices drop.

The crude oil price fell slightly but was still above $80/barrel ahead of the American Petroleum Institute’s weekly inventory data release at 4:30 PM ET. Analysts believe that crude oil stocks will be up 140,000 this week. This would mark the third consecutive week with gains.

Futures fell 0.7% to $80.06 per barrel by 6:30 AM ET. By the same time, they were 0.8% lower at $82.77 per barrel

Elsewhere, the International Energy Agency warned that the world isn’t investing enough either in fossil fuels or in renewables to avert future energy and climate crises. The IEA said investment in renewables needed to triple investment in renewables to meet the Paris Accord’s aim of limiting average temperature rises.