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Inflation Produces Lower Stock Prices
Producer prices pop, Broadcom breaks to new record highs, and more from the day.
NEWS
Inflation Produces Lower Stock Prices
Source: Tenor.com
The markets slipped today as hotter-than-expected inflation data weighed on sentiment, with all the major indices closing the day in the red. Those expecting a slowdown ahead of the holiday season may be disappointed because the news flow just keeps on coming. 👀
Today's issue covers the mashup of global economic data, Broadcom’s breakout to record highs, and other noteworthy pops and drops. 📰
Here’s the S&P 500 heatmap. 2 of 11 sectors closed green, with consumer staples (+0.29%) leading and consumer discretionary (-0.83%) lagging.
Source: Finviz.com
And here are the closing prices:
S&P 500 | 6,051 | -0.54% |
Nasdaq | 19,903 | -0.66% |
Russell 2000 | 2,361 | -1.38% |
Dow Jones | 43,914 | -0.53% |
Most bullish/bearish symbols on Stocktwits at the close: 📈 $NX, $CIEN, $HIMX, $KROS, $AYRO 📉 $MRKR, $QTTB, $INO, $LOVE, $NUE*
*If you’re a business and want to access this data via our API, email us.
ECONOMY
Anxiety Rises As Producer Prices Pop 😬
November’s producer price index (PPI) rose 0.4% MoM and 3% YoY, while core PPI (excluding food and energy) rose 0.2% MoM and 3.5% YoY. Both annual increases were the largest seen since February 2023, reigniting fears that inflation could bounce back. 🌡️
Some 80% of the jump in final-demand goods prices came from a 3.11% surge in food prices. Chicken eggs soared 54.6% amid supply chain issues, while services costs also edged higher by 0.2%.
However, the Fed appears locked into another 25 bp cut next week, but 2025’s outlook remains at risk. 🔮
Several central banks cut rates this week, including the European Central Bank (ECB), which cut another 25 bps today to balance stubborn inflation and weak economic growth. Meanwhile, the Swiss National Bank (SNB) cut 50 bps to deal with the opposite issue of many countries: low inflation and a strong currency.
Chinese stocks gave back some of their recent gains as the market questions recent efforts to recharge its economy. Officials are trying to assure the markets that its borrowing, interest rate cuts, and other initiatives will offset Trump’s tariffs.
The bulls remain in control long term, though the short-term pullback in stocks continues after getting overheated. From a sentiment perspective, having President-elect Donald Trump ring the New York Stock Exchange (NYSE) opening bell and touting the strength of the market is about as bullish as it gets. 🥳
Time will tell how this all ends. But for now, companies are taking advantage of it while they can. ServiceTitan is the latest Nasdaq IPO to price up its offering and close significantly higher in its first day of trading. It’s the first notable venture-backed IPO since Rubrik came public in April, so it’s being closely watched by the market into 2025. Many expect the level of IPOs and other M&A activity to surge under the new administration, so the more appetite we see, the more Wall Street will deliver. 🤷
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