Inflation hasn't turned out to be temporary and has accelerated, reaching the highest in a single month since January 1990. It is high even when measured against pre-pandemic prices, so this isn't merely catch-up for the deflation of last spring. It is no longer merely about a narrow set of Covid-disrupted supply chains, or demand for used cars and other popular items. Even the get-out-of-jail-free card of FAIT, the Fed's year-old policy of flexible average inflation targeting, is wearing thin.
Inflation Surge Whips Up Market Froth
Enthusiasm for riskier corners of the market has sent stock indexes and cryptocurrencies to record highs. A powerful driver, investors say, is surging inflation and the effect it has suppressing returns on safe government bonds, a main alternative to stocks.
Last week so-called real yields, which take into account the corrosive effects of inflation, hit some of their lowest levels on record. One measure of real yields, 10-year Treasury inflation-protected securities, fell to minus 1.2%, according to Tradeweb. That is the lowest on record, according to data going back to February 2003.
Inflation Bets Give a Boost to Small-Cap Stocks
Small-cap stocks have leapt higher in recent days as investors bet on companies they hope can respond quickly to rising inflation.
The Russell 2000 index of smaller stocks has advanced 5% in November, outpacing the S&P 500 large-cap benchmark's 1.7% gain. On Nov. 2, the Russell 2000 ended a seven-month drought with a record close and has since added three more.
U.S. Moves to Ease Tariffs on Imported Steel, Aluminum From Japan
WASHINGTON-The Biden administration is moving to ease import tariffs on Japanese steel and aluminum, in the latest step by the White House to reset trade relations with allies.
The U.S. and Japan will begin talks to address bilateral concerns over steel and aluminum issues, including the tariffs imposed by the Trump administration, U.S. trade and commerce officials said in a joint statement Friday.
Airbus Says It Can't Meet Current Demand for Single-Aisle Jets
DUBAI-Airbus SE said it can't ramp up production of its popular single-aisle jet fast enough to meet demand and forecasts delivery constraints for another three years as airlines clamor for new planes again.
Airbus Chief Financial Officer Dominik Asam, in an interview ahead of the Dubai air show that started Sunday, said airlines are asking for delivery of new aircraft after most of them stopped ordering new jets and tried in many cases to defer or cancel orders during the Covid-19 pandemic. Airbus is pushing sales-what the industry calls sales "campaigns"-but is constrained on what it can promise, Mr. Asam said.
In Belarus Border Standoff, Europe's Debates Converge on Poland
WARSAW-On Europe's hot-button issues of the day, from abortion to migration and relations with Russia, all roads now run through Poland.
For half a decade, the country's nationalist government has been locked in an escalating culture war within the European Union. Now, Poland finds itself on the front lines of Europe's external conflict.
Property Developer Sunac China to Raise $952 Million
Property developer Sunac China Holdings Ltd. is raising 7.42 billion Hong Kong dollars (US$952 million) to partly repay its debt.
The company will raise a total of HK$5.09 billion by issuing 335 million shares for HK$15.18 each and another HK$2.33 billion by selling a 5.1% stake in its unit Sunac Services Holdings Ltd., the company said late Sunday.
Chip Shortage Has Manufacturers Turning to Lower-Tech Models
Manufacturers struggling with a shortage of semiconductor chips are finding workarounds, executives said, redesigning products, shipping uncompleted units and focusing on older, lower-tech models.
After pushing for years to add digital features like screens and wireless connectivity, makers of appliances and vehicles are reversing, temporarily, to continue supplying products to dealers and consumers amid a shortfall in semiconductors that industry officials project will last into next year.
Write to paul.larkins@dowjones.com
Expected Major Events for Monday
00:01/UK: Nov Rightmove Monthly House Price Index
06:00/FIN: Sep Retail sales
06:00/FIN: Oct CPI
07:00/NOR: Oct External trade in goods
08:00/SVK: Sep New orders in industry
08:30/SWE: Oct CPI
09:00/CZE: Sep Monthly Balance of Payments
09:00/POL: Oct CPI
09:00/BUL: Oct CPI
09:00/BUL: 3Q Labour force survey
10:00/EU: Sep Foreign trade
11:00/IRL: Sep Goods Exports and Imports
13:00/POL: Sep Balance of payments
15:59/UKR: Sep Trade
All times in GMT. Powered by Kantar Media and Dow Jones.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
11-15-21 0039ET
