NEWS
Bears Battle To Keep Stocks Subdued

An uptick in inflation helped the bears hold back Bitcoin’s push above $90k, while semiconductors slumped on further fears that SMCI could be delisted from the Nasdaq if it doesn’t file its delayed annual report soon. And AMD cut 4% of its workforce, sparking some growth fears. Now, all eyes turn to tomorrow’s producer price index figures and Fed Chair Jerome Powell’s speech. 👀

Today's issue covers October’s inflation uptick, a kickoff of our Nvidia Day events, and other noteworthy pops and drops. 📰

Here’s the S&P 500 heatmap. 8 of 11 sectors closed green, with consumer discretionary (+0.85%) leading and technology (-0.35%) lagging.

And here are the closing prices: 

Most bullish/bearish symbols on Stocktwits at the close: 📈 $PET, $ARBK, $SWKS, $PAGS, $BTCM 📉 $DNMR, $ZETA, $HTOO, $CYBR, $VSAT*

*If you’re a business and want to access this data via our API, email us.

ECONOMY
Inflation Inches Higher Within Expectations 🔺

The consumer price index (CPI) increased 0.2% MoM in October, bringing the 12-month inflation rate up to 2.6% and matching expectations. Core inflation, which excludes food and fuel, met estimates by rising 0.3% MoM and 3.3% YoY. 📊 

While goods prices have been a major tailwind of the U.S. disinflation trend, services inflation remains a key concern among investors and economists.

Shelter prices rose another 0.4% MoM in October, doubling its September uptick and rising by 4.9% YoY. They’re a third of the broader index’s weighting and were responsible for more than half this month’s gain in the “all items” measure. 🏘️ 

Economists had estimated that shelter prices staying elevated was simply a matter of timing, given the significant lag between how the BLS calculates them and the current rates people are paying in the markets. However, after a year of waiting for that thesis to pan out, some are beginning to worry about goods inflation picking back up.

Used vehicle costs were a major driver of goods inflation in the post-pandemic environment and are back on the rise, jumping 2.7% MoM. With energy and food prices finding their own floor, any material uptick in these numbers without a respective fall in shelter prices (or overall services inflation) would prevent the Fed from reaching its 2% target. 😬 

The positive news is that we’re not seeing a major acceleration higher in any of these individual categories yet, but investors (and the Fed) are monitoring this risk into 2025.

Bonds had a bad day following an initial jump, suggesting that market participants still believe there’s enough inflation risk to keep interest rates elevated—even as the Federal Reserve continues its rate-cutting campaign.

The rise in rates gave bears cover to put a short-term lid on the rally in stocks and Bitcoin. We’ll see if tomorrow’s producer price index (PPI) data shows similar risks and can further embolden the bears. Or if the bulls parade past this latest worry. 🤷 

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