US stocks tread water as earnings optimism offsets concern over inflation, while bitcoin nears all-time highs after ETF launch

• US stocks futures were flat Wednesday, capping five straight days of gains on earnings optimism.
• Japan’s trade balance weakened to its slowest in seven months, fanning inflationary fears.
• Bitcoin traded near its all-time high of $64,895 after the first futures-based ETF made its trading debut.
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US stock futures were roughly flat on Wednesday, but held near record highs on Wednesday, after a string of third-quarter earnings results helped shore up risk appetite that has been dented recently by concerns over the longer-term impact of inflation.

Futures on the Dow Jones, S&P 500, Nasdaq fell between 0.01% and 0.09% as of 4:30 a.m ET, suggesting a choppy start to trading later in the day.

A total of 57 companies in the US have reported earnings so far, of which 50 have beat expectations, Deutsche Bank strategists said.

Equities appear to be overlooking the inflation story, for now, while earnings roll in, but higher oil prices keep adding to jitters. “Investor expectations of future inflation are still moving higher in many places,” Deutsche Bank strategists said.

Although stocks are near record highs, bullish sentiment currently sits at a one-year low on concerns of rising consumer price pressures and disruptions to supply chains, Bank of America found.

In China, the property market remains in focus after home prices fell 0.08% in September, their first monthly decline since April 2015.

“Evergrande and the China property developer sector have fallen off the radar in the past week or so, but the issues there have not gone away,” said Jeffrey Halley, a senior market analyst at OANDA. More updates are expected on this front, as the first 30-day grace period on a series of unpaid offshore bond coupons nears, he said.

Japan’s trade balance growth in September weakened to its slowest in seven months. Higher import costs are fuelling fears of inflation.

Equities in Asia were mostly higher earlier in the session, but soft trading in China and Japan saw most of those gains unwind. The Shanghai Composite fell 0.2%, Tokyo’s Nikkei was about flat, while Hong Kong’s Hang Seng rose 1.1%.

In Europe, data showed UK inflation unexpectedly slowed to 3.1% in September from 3.2% in August, largely due to a measurement quirk. But according to UBS, the forces pushing prices up are set to increase in the coming months, suggesting inflation will be moving up before the end of the year.

London’s FTSE 100 lost 0.2%. The Euro Stoxx 600 and Frankfurt’s DAX were about flat.

Bitcoin rose 2.6% to $63,957 after the first futures-based bitcoin ETF made its debut in the US on Tuesday. The ProShares ETF saw the second-heaviest debut volume on record, with more than 24 million shares changing hands when it began trading.

The first bitcoin ETF marks “one of the most credible elements to the story that shows a pathway for major funds, institutions, and hedge funds to feel more certain about this,” said Eric Schiffer, CEO of private-equity firm Patriarch Organization.

Oil slightly retreated after the Chinese government threatened to intervene in the coal market to tame record high prices.

Brent crude fell 0.9% to $84.28 a barrel and West Texas Intermediate fell 0.9% to $81.62 a barrel.

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