Mixed Earnings, Soggy Economic Data Freeze Stock Market Rally

Global stock shares slumped and may pull U.S. markets down, too, although equity futures trading was mixed early on. The big fundamental driver was yet another data release in China that indicated a slower economy there. Add in weaker U.S. reports that raise fresh uncertainty for Federal Reserve interest rate policy timing. One Fed member, Governor Daniel Tarullo, said in a Tuesday speech that he doesn’t currently favor a 2015 interest rate hike.

For stock markets that’s a challenge. Some traders might embrace the extension of overly easy borrowing conditions if just for a few more months, while others are getting nervous that delays simply reflect a worse-than-expected turn for the global economy that could fester.

As if on cue, consumer inflation in China eased more than expected, adding to the list of concerns surrounding the world's second-largest economy. The country's consumer price index climbed 1.6% in September from a year earlier, against an expected 1.8% rise and following August's 2% gain. Meanwhile, China's producer price index fell 5.9%, logging its 43rd straight month of decline.

As global stocks dip, gold stretched to three-month highs after four straight days of gains. Investors are opting for the shiny stuff as the dollar weakens on expectations for a delayed Fed rate hike. The weak Chinese pricing data only drove more interest in gold buying; it earlier hit $1,175.10 an ounce, its highest since July 6.

Retail Sputters? Sales at U.S. retailers rose just 0.1% in September after no change in August, government data showed. Auto sales were strong once again, jumping 1.7%. And sales at gas stations fell as expected, down 3.2%, because of lower prices at the pump. Yet total sales excluding autos and gas were flat. So-called control group sales that factor into GDP rose a tame 0.2%. Still on tap: The Fed’s Beige Book collection of on-the-ground economic conditions from around the country. Let’s see what anecdotal reports have to say about consumer spending.

Producer Prices Clipped By Weak Gas. U.S. wholesale prices fell a seasonally adjusted 0.5% in September, largely because of the biggest drop in gasoline since the first month of the year, a separate report this morning revealed. Excluding the volatile categories of food, energy and trade, core prices dipped 0.3%. Over the past year overall producer prices have fallen an unadjusted 1.1%, and the year-over-year increase has been negative for eight straight months, MarketWatch reports. Core wholesale prices are up 0.5% in the past 12 months, however.

Earnings Wrap Looks Mixed: The earnings reports continue to flow. Of note, Wells Fargo & Co WFC beat the Street view with its revenue as loans expanded. JPMorgan Chase JPM fell after the bank’s quarterly revenue missed Street expectations. Intel Corporation INTC traded lower after its post-bell report Tuesday beat Street expectations but some traders may instead have focused on slower growth expectations for its data-center business. Delta Air Lines, Inc. DAL saw its profit lifted by lower fuel costs and its CEO said that boost could continue. And in other company news, Facebook Inc FB is reportedly testing a dedicated video channel, intensifying its rivalry with Alphabet Inc Class C GOOG GOOGL property YouTube. Netflix, Inc. NFLX is among the companies slated to report after the market’s close.

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