Stock futures rose as inflation showed further signs of easing, which could make the case for the Federal Reserve to continue slowing its pace of rate hikes and prevent a harsher economic downturn.
(Bloomberg) — Stock futures rose as inflation showed further signs of easing, which could make the case for the Federal Reserve to continue slowing its pace of rate hikes and prevent a harsher economic downturn.
Excluding food and energy, the consumer price index rose 0.3% last month and was up 5.7% from a year earlier, according to a Labor Department report Thursday. Economists see the gauge — known as the core CPI — as a better indicator of underlying inflation than the headline measure. All of the figures matched the median estimates in a Bloomberg survey of economists.
Comments:
- “Today’s figures will be cautiously welcomed by investors as they show that the pace of inflation has slowed somewhat,” said Richard Flynn, managing director of Charles Schwab UK.
- “Markets have remained confident the Fed will be able to control inflation, but that remains to be seen,” said Nancy Davis, founder of Quadratic Capital Management.
- “Very much in line with consensus and our own expectations. We will be paying close attention to Fed communications going forward as we assess the likelihood of 25 vs. 50 bps for the Jan/Feb FOMC meeting,” said Andrew Patterson, senior Eeonomist at Vanguard.
Fed Bank of Philadelphia President Patrick Harker said the central bank should lift rates in quarter-point increments “going forward” as it approaches the end point in its most aggressive tightening campaign in decades.
In corporate news, American Airlines Group Inc. said fourth-quarter profit and revenue exceeded expectations, helped by robust holiday travel demand. Workers at Twitter Inc.’s Singapore office were told to empty out their desks and vacate the premises, said people familiar with the situation, as Elon Musk continues to pare expenses around the globe.
Key events this week:
- China trade, Friday
- US University of Michigan consumer sentiment, Friday
- Citigroup, JPMorgan, Wells Fargo report earnings, Friday
This week’s MLIVE Pulse Survey:
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.6% as of 8:55 a.m. New York time
- Nasdaq 100 futures rose 0.6%
- Futures on the Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 1%
- The MSCI World index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index fell 0.8%
- The euro rose 0.7% to $1.0833
- The British pound rose 0.7% to $1.2236
- The Japanese yen rose 2.2% to 129.58 per dollar
Cryptocurrencies
- Bitcoin rose 4.2% to $18,302.78
- Ether rose 4.8% to $1,407.59
Bonds
- The yield on 10-year Treasuries declined seven basis points to 3.47%
- Germany’s 10-year yield declined nine basis points to 2.12%
- Britain’s 10-year yield declined 12 basis points to 3.29%
Commodities
- West Texas Intermediate crude rose 2% to $78.99 a barrel
- Gold futures rose 1.4% to $1,904.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
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