Market dynamics in the moment (futures):
📈 S&P 500: +0.34%
📈 Nasdaq: +0.38%
📈 Dow Jones: +0.32%
🌕 Gold: -0.08% ($1809)
⚫️ Brent oil: +0.14% ($80.48)
🇺 US Treasuries 10 years: -0.31% (3.494%/year).
U.S. stock index futures are trading in the green. Yesterday the major indices finished the day on the plus side, with the S&P 500 up 0.73%, the Dow Jones up 0.30%, and the Nasdaq up 1.01%. The stock market reacted positively to the release of inflation data for November. The stock market in Asia is showing positive dynamics.
Over the past month the U.S. consumer price index decreased the growth rate to 7.1% on an annualized basis from September’s 7.7%. Analysts were expecting the growth rate to decrease to 7.3%. In monthly terms, prices rose 0.1%, while the market had expected to see a rise of 0.3%.
The core index, which excludes food and energy, rose 6% year-over-year after 6.3% in September, and below the consensus, which had expected a 6.1% increase. At the same time, the index rose 0.2% month-on-month, versus the expected 0.3%. This is the lowest rate of price growth since September 2021.
The slowdown in inflation may reinforce the Fed’s view that it should slow the pace of interest rate hikes and end the policy tightening cycle sooner. According to FedWatch, the market is betting that the central bank will raise rates by 50 bps at today’s meeting. Then, at the first two meetings in 2023, there will be two more hikes, but only by 25 bps. Thus, rates could peak at 4.75-5% by March.
💎 “The November report confirms the thesis of lower inflationary pressures and is welcome news for the Fed. The market has already fully appreciated that the central bank will raise rates by 50 bps today, and with inflation already trending downward, the Fed can direct all of its attention to the labor market,” Morgan Stanley strategists wrote in a note to clients.
The publication of economic data today:
– Fed meeting results.
– Chairman Powell’s press conference
– U.S. crude oil stocks