Early-session market investors are bidding indexes higher this Friday morning, following a very strong Consumer Price Index (CPI) report for November ahead of the opening bell: +0.8% on the headline was 10 basis points higher than expected, but 10 basis points below the previous month’s +0.9%, which was the highest print since 2008. Core CPI — stripping out food and energy prices — came in on the nose with expectations, +0.5%, down from the +0.6% for October.
The year-over-year numbers are even more impressive: +6.8% topped expectations for +6.7%, and represent the highest read since June 1982, 39 1/2 years ago. This is also 60 basis points higher from the previous month’s headline. Core year-over-year CPI came in at +4.9%, the strongest read since June 1991, now more than 30 years ago. Led by Energy (+3.5%) and Shelter (+3.4%), this is quite the irrefutable metric in terms of inflation in the U.S. economy.
The indexes were modestly up ahead of the report: the Dow was +50 points, the Nasdaq +20 and the S&P 500 +10. In the mere minutes since, the Dow is now +150 points, the Nasdaq +130 and the S&P 500 +30. Buyers continue to fill in where valuations had been reduced upon the announcement of a faster taper from the Fed, along with news of a new Omicron variant two weeks ago.
That faster taper is now front-and-center for what investors expect from a Fed policy initiative; the meeting of the Federal Open Market Committee (FOMC) commences next week, and no backtracking on a more hawkish policy toward drawing down asset purchases can be expected. If anything, we may hear next week from Fed Chair Powell further articulation on how the $15 billion in asset purchase reduction per month currently in place will increase in the coming months.
And while this brings economists to ponder increased inflation in our near future, the market clearly loves the news this morning. Just the idea that fewer question marks remain regarding Fed policy decisions next week (and beyond) has helped stocks bid higher in early trading.
After the opening bell this morning, we get a preliminary read on the latest University of Michigan survey for December: expectations are for an increase to 68.0 from the previous print’s 67.4. Also, a 5-year expected inflation figure (also preliminary) will be hitting the tape later this morning. Expectations are for +3% growth.
We’ve obviously had our share of bumps in the road as we travel back toward pre-pandemic levels of economic growth in the U.S., but we’re clearly making progress. Including yesterday’s first sub-200K headline on Initial Jobless Claims and last week’s 4.2% Unemployment Rate, meaningful growth can now be tracked in virtually all segments of the domestic economy. It’s doubtful Jay Powell could have drawn it up any better himself.
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CPI for November Increased Higher than Expected
Early-session market investors are bidding indexes higher this Friday morning, following a very strong Consumer Price Index (CPI) report for November ahead of the opening bell: +0.8% on the headline was 10 basis points higher than expected, but 10 basis points below the previous month’s +0.9%, which was the highest print since 2008. Core CPI — stripping out food and energy prices — came in on the nose with expectations, +0.5%, down from the +0.6% for October.
The year-over-year numbers are even more impressive: +6.8% topped expectations for +6.7%, and represent the highest read since June 1982, 39 1/2 years ago. This is also 60 basis points higher from the previous month’s headline. Core year-over-year CPI came in at +4.9%, the strongest read since June 1991, now more than 30 years ago. Led by Energy (+3.5%) and Shelter (+3.4%), this is quite the irrefutable metric in terms of inflation in the U.S. economy.
The indexes were modestly up ahead of the report: the Dow was +50 points, the Nasdaq +20 and the S&P 500 +10. In the mere minutes since, the Dow is now +150 points, the Nasdaq +130 and the S&P 500 +30. Buyers continue to fill in where valuations had been reduced upon the announcement of a faster taper from the Fed, along with news of a new Omicron variant two weeks ago.
That faster taper is now front-and-center for what investors expect from a Fed policy initiative; the meeting of the Federal Open Market Committee (FOMC) commences next week, and no backtracking on a more hawkish policy toward drawing down asset purchases can be expected. If anything, we may hear next week from Fed Chair Powell further articulation on how the $15 billion in asset purchase reduction per month currently in place will increase in the coming months.
And while this brings economists to ponder increased inflation in our near future, the market clearly loves the news this morning. Just the idea that fewer question marks remain regarding Fed policy decisions next week (and beyond) has helped stocks bid higher in early trading.
After the opening bell this morning, we get a preliminary read on the latest University of Michigan survey for December: expectations are for an increase to 68.0 from the previous print’s 67.4. Also, a 5-year expected inflation figure (also preliminary) will be hitting the tape later this morning. Expectations are for +3% growth.
We’ve obviously had our share of bumps in the road as we travel back toward pre-pandemic levels of economic growth in the U.S., but we’re clearly making progress. Including yesterday’s first sub-200K headline on Initial Jobless Claims and last week’s 4.2% Unemployment Rate, meaningful growth can now be tracked in virtually all segments of the domestic economy. It’s doubtful Jay Powell could have drawn it up any better himself.