CPI Surprise Brings The Bears’ Demise

Bank earnings and better inflation fuel the bulls. Plus, crypto's latest milestone, Hindenburg Research's retirement, and a fundraiser for LA wildfire relief.

NEWS
CPI Surprise Brings The Bears’ Demise

Source: Tenor.com

Cooler-than-expected consumer price growth and strong bank earnings put the bulls back on track, with crypto, big tech, and financials leading the charge. With the Fed’s next meeting two weeks away, all eyes now turn to earnings and Trump’s inauguration to determine the next major catalyst for the market. 👀

Today's issue covers two things giving bulls the green light, short-seller Hindenburg Research's retirement, crypto’s latest milestone, and a chance to hear great comedy while helping Stocktwits raise funds for LA wildfire relief. 📰

Here’s the S&P 500 heatmap. 10 of 11 sectors closed green, with financials (+2.55%) leading and consumer staples (-0.34%) lagging.

Source: Finviz.com

And here are the closing prices: 

S&P 500

5,950

+1.83%

Nasdaq

19,511

+2.45%

Russell 2000

2,263

+1.99%

Dow Jones

43,222

+1.65%

ECONOMY
Why CPI Gave Bulls The Green Light 🚦 

Bulls cautiously bought back into risk assets yesterday following cooler-than-expected producer prices, hoping for more good news on the inflation front this morning. And luckily, the December consumer price index (CPI) report delivered the goods.

Headline CPI rose 0.4% MoM and 2.9% YoY, essentially meeting expectations. However, core inflation rose just 3.2% YoY, narrowly beating the 3.3% outlook. Shelter prices, which account for one-third of the CPI weighting, rose 4.6% YoY, representing their smallest one-year gain since January 2022. 📊 

Sticky services inflation has been the primary concern for the Fed and markets, so seeing shelter’s growth rate decelerate is certainly a positive sign. More importantly, the market was simply relieved to see that inflation’s growth…although stagnant, has not re-accelerated higher just yet.

Investors will continue to watch the labor market and economic growth data like hawks, though, for signs that continued strength could place further upward pressure on prices. Additionally, the coming Trump administration’s policies are set to be heavily analyzed for their potential impact on inflation. 🕵️ 

Nonetheless, the inflation problem has been kicked down the road for at least another month.

Meanwhile, better-than-expected results across the board from the major banks helped drive the financial sector higher. With investors looking for earnings season to help take some of the focus off the Fed, a hot start certainly excited the bulls. 🎉 

JPMorgan CEO Jamie Dimon adopted his usual measured approach, delivering a solid earnings beat and saying the “U.S. economy remains resilient.” However, he noted two significant risks that still exist, saying, 

“Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II. As always, we hope for the best but prepare the firm for a wide range of scenarios,” 

JPMorgan CEO Jamie Dimon

Citi, Wells Fargo, Goldman Sachs, and BNY Mellon delivered beats, too, providing optimism alongside inflation’s cooler reading to put the bulls back in control. 🐂 

FUNDRAISER
A Can’t-Miss Comedy Show For LA Wildfire Relief 🎤 

Host Cipha Sounds will be joined by Mark Normand, Sam Jay, Jim Florentine, Jon Rudnitsky, Andrew Dice Clay, and more on Thursday, January 16th, at 8:00 pm ET at The Stand in NYC and everywhere on Punchup.live. 

Stocktwits is proudly sponsoring the event, and all proceeds will benefit The American Red Cross. It’s an incredibly hard time for many people, so let’s have some laughs and raise some money for those impacted by this tragedy. 🤝 

Source: Punchup.live

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