We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pre-market futures have launched into orbit this morning, directly on results from the Consumer Price Index (CPI) report for October out ahead of today’s open. Results tacked down 10 basis points (bps) on basically all important metrics — month over month headline: 0.0% versus +0.1% expected (and down from +0.4% the previous month), month over month core: +0.2% versus +0.3% expected and previously, year-over-year headline: +3.2% versus +3.3% expected and +3.7% in September, and year-over-year core +4.0% versus +4.1% expected and previously reported.
Ahead of this report, the Dow and S&P 500 were up single digits, with the Nasdaq up nearly 50 points. This CPI report blew pre-market numbers into another stratosphere within seconds: +300 points on the Dow, +54 on the S&P and +250 on the Nasdaq. Even the troubled Russell 2000 is up +50 points on the news. Keep in mind markets have already gained nicely from late-October lows, and all four major indices are now trading up for the week, month and year to date.
CPI on a headline year over year basis is referred to as the Inflation Rate, and coming in a half of a percentage point lower than both August and September prints is indeed good news. We’re still a tad higher than the +3.0% we saw in June, but appear to be headed back in the right direction (toward +2%, the Fed’s optimum inflation number). Recall where we were on this metric a year ago: a +7.1% Inflation Rate in November of last year. Coming down nearly 400 bps over that time is indeed something to write home about.
On core CPI year over year, we are now as close to a “3-handle” as we have in more than two years. The last time we were sub-4% was back in May of 2021 — basically the foothills of the Great Reopening. Our cycle high was back in September of last year, +6.6%, so even on this “stickier” inflation figure, we’ve rolled off 260 bps in little more than a year.
As a result, not only have pre-markets blossomed — ostensibly on the idea that no future interest rate hikes will be forthcoming this cycle (the next Fed meeting is December 12-13), and that optimistic views that interest rate cuts await us in 2024 remain unabated. Even bond yield spreads cooled notably on this news, with a 2-year falling from 5.04% to 4.87% and a 10-year from 4.62% to 4.49%. Considering our current Fed funds rate is still 5.25-5.50%, it looks like a comfortable ceiling on rates with which to bring down inflation gradually.
Home Depot (HD - Free Report) picked a good morning to report Q3 earnings, as shares are up nearly +4% after beating expectations on both top and bottom lines this morning: by +1.33% on the bottom line to earnings of $3.81 per share and revenues +0.50% to $37.71 billion. Although both these headline numbers are below the year-ago quarter, Home Depot represents consumer spending in ways that help articulate the monthly CPI print.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
October Core CPI Lowest in 2 Years
Pre-market futures have launched into orbit this morning, directly on results from the Consumer Price Index (CPI) report for October out ahead of today’s open. Results tacked down 10 basis points (bps) on basically all important metrics — month over month headline: 0.0% versus +0.1% expected (and down from +0.4% the previous month), month over month core: +0.2% versus +0.3% expected and previously, year-over-year headline: +3.2% versus +3.3% expected and +3.7% in September, and year-over-year core +4.0% versus +4.1% expected and previously reported.
Ahead of this report, the Dow and S&P 500 were up single digits, with the Nasdaq up nearly 50 points. This CPI report blew pre-market numbers into another stratosphere within seconds: +300 points on the Dow, +54 on the S&P and +250 on the Nasdaq. Even the troubled Russell 2000 is up +50 points on the news. Keep in mind markets have already gained nicely from late-October lows, and all four major indices are now trading up for the week, month and year to date.
CPI on a headline year over year basis is referred to as the Inflation Rate, and coming in a half of a percentage point lower than both August and September prints is indeed good news. We’re still a tad higher than the +3.0% we saw in June, but appear to be headed back in the right direction (toward +2%, the Fed’s optimum inflation number). Recall where we were on this metric a year ago: a +7.1% Inflation Rate in November of last year. Coming down nearly 400 bps over that time is indeed something to write home about.
On core CPI year over year, we are now as close to a “3-handle” as we have in more than two years. The last time we were sub-4% was back in May of 2021 — basically the foothills of the Great Reopening. Our cycle high was back in September of last year, +6.6%, so even on this “stickier” inflation figure, we’ve rolled off 260 bps in little more than a year.
As a result, not only have pre-markets blossomed — ostensibly on the idea that no future interest rate hikes will be forthcoming this cycle (the next Fed meeting is December 12-13), and that optimistic views that interest rate cuts await us in 2024 remain unabated. Even bond yield spreads cooled notably on this news, with a 2-year falling from 5.04% to 4.87% and a 10-year from 4.62% to 4.49%. Considering our current Fed funds rate is still 5.25-5.50%, it looks like a comfortable ceiling on rates with which to bring down inflation gradually.
Home Depot (HD - Free Report) picked a good morning to report Q3 earnings, as shares are up nearly +4% after beating expectations on both top and bottom lines this morning: by +1.33% on the bottom line to earnings of $3.81 per share and revenues +0.50% to $37.71 billion. Although both these headline numbers are below the year-ago quarter, Home Depot represents consumer spending in ways that help articulate the monthly CPI print.