Last Updated 4:00PM EST
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Stock indices finished today’s trading session in the green. The Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 0.82%, 0.46%, and 0.48%, respectively.
Earlier today, Treasury Secretary Janet Yellen expressed optimism at The Wall Street Journal’s CEO Council Summit, stating that the U.S. is on track for a ‘soft landing’ – a scenario where the economy grows, the job market stays strong, and inflation cools down.
This comes after recent Labor Department data revealed a slight easing in inflation, with the consumer-price index rising 3.1% in November compared to 3.2% in October.
Yellen, leveraging her experience as an academic economist and former Federal Reserve Chair, pointed out that inflation is steadily moving towards the Fed’s 2% target, and she doesn’t foresee the final phase of this journey being particularly painful for Americans.
Yellen also touched on the role of public perception in managing inflation, noting that, unlike previous situations, long-term inflation expectations hadn’t escalated significantly. As a result, this aided in the smooth decrease of price increases.
In addition, with inflation declining, real interest rates–which are inflation-adjusted–are effectively rising, which could influence the Fed’s decisions on interest rates.
Nevertheless, many Americans remain dissatisfied despite the economy’s strength. This can be attributed to the fact that prices are high and still increasing, just at a slower but still elevated rate.
Last updated: 9:30AM EST
Stocks were mixed at the open on Tuesday morning, with the Nasdaq 100 (NDX) and the S&P 500 (SPX) down by 0.08% and 0.19%, respectively, and the Dow Jones Industrial Average (DJIA) up by 0.05% at 9:30 a.m. EST, December 12.
The Consumer Price Index (CPI) increased by 0.1% in November. For reference, economists were not expecting the index to gain this month. On a year-over-year basis, the index gained 3.1%, which was below the consensus estimates of 3.2%.
The headline CPI was kept in check by a fall in gasoline prices, with the gasoline index sinking by 6.0% in November and the overall energy index declining by 2.3%. However, food prices gained 0.2% in November. In addition, shelter prices, which comprise about 33% of the CPI weighting, increased 0.4% during the month and were up 6.5% on an annual basis.
Excluding volatile food and energy prices, the core CPI increased 0.3% in November and was up 4% from a year ago. These numbers were in line with estimates and had changed little from the prior month.
The inflation numbers are still well above the Fed’s target of 2%.
Meanwhile, the CNBC Fed Survey indicates that traders expect the Fed to start lowering rates from June onwards. Overall, the average respondent anticipates rate cuts of about 85 basis points next year. Respondents also believe that the probability of a soft landing for the economy could be as high as 47%, up by 5 points from the October survey. They project the likelihood of a recession in the next year to be 41%, the lowest since the spring of last year.
First published: 2:17AM EST
U.S. Futures are climbing higher on Tuesday, continuing the optimism over the outcome of the two-day Federal Open Market Committee (FOMC) meeting scheduled to begin today. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) are up by 0.19%, 0.06%, and 0.05%, respectively, at 2:14 a.m. EST, December 12.
Investors are also awaiting the release of the November Consumer Price Index report, a significant economic indicator that is scheduled to be released before the opening bell today. The data holds importance for policymakers, businesses, and consumers, as it impacts consumer spending decisions, business outlooks, and Federal Reserve policy decisions.
In stock-specific news, Alphabet’s (GOOGL) Google has lost an antitrust lawsuit filed by the video game developer Epic Games. The court found Google’s Android app store to be anti-competitive. Moreover, Oracle (ORCL) stock shed about 9% in yesterday’s after-trading session following the release of mixed fiscal second-quarter results.
Meanwhile, WTI crude oil futures are hovering near $76.44 per barrel as of the last check, as investors adopt a cautious approach in anticipation of key interest rate decisions and upcoming inflation data releases.
Elsewhere, European markets are expected to trade higher this morning as markets await the Federal Reserve’s monetary policy decision.
Asia-Pacific Markets End Mixed on Tuesday
Asia-Pacific indices ended mixed on Tuesday as investors expected the U.S. central bank to hold the Federal Funds rate in the current range of 5.25%-5.5%.
Hong Kong’s Hang Seng and China’s Shanghai Composite indexes ended up by 1.21% and 0.4%, respectively, while the Shenzhen Component index closed lower by 0.08%.
Japan’s Nikkei index finished higher by 0.16%, whereas the Topix index edged down by 0.23%.
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