If that’s true, inflation pressures could finally start to subside more dramatically. Investors may be hoping that’s the case, which is one reason to justify the big stock market surge Thursday. But a report from real estate brokerage firm Redfin (RDFN), also released Thursday, showed that the median monthly rent nationwide fell 2.5% in September.
- Even though the hotter-than-hoped-for inflation report is sparking fears of more big rate hikes from the Federal Reserve, some optimists are starting to see light at the end of the Fed tightening tunnel.
- The government said in the CPI report that both rent and owners’ equivalent rent (which measures how much a homeowner estimates they could get if they rented their property) rose 0.8% from August.
- On Wednesday, the Producer Price Index (PPI) will show wholesale prices for business, another inflation indicator.
- More debt, different buyers and increased regulation pose challenges.
Fruits and vegetables rose 1.6% for the month, while cereals and bakery products rose 0.9%. Other groceries increased 0.5% in September, following a 1.1% increase in August. Economists at Barclays said in a report Thursday that they now expect another three-quarters of a percentage point rate increase in November and December and then a half-point hike at the Fed’s February 2023 meeting. The government said in the CPI report that both rent and owners’ equivalent rent (which measures how much a homeowner estimates they could get if they rented their property) rose 0.8% from August. The increase in owner’s equivalent rent was the biggest since June 1990. It was a dramatic turnaround for stocks, which plunged after the opening bell after the CPI report came out.
So with rents rising dramatically over the past year (along with housing prices), it’s no wonder that CPI numbers continue to come in higher than expected. But there is some confusion about whether rent increases are finally peaking or not. Market watchers will have their focus trained on Wednesday this week, when the FOMC ends its two-day meeting with a decision on the federal funds interest rate that currently stands at 5.25% to 5.5%. The food at home index, a proxy for grocery store prices, increased 0.7% in September from the month prior and 13% over the last year, according to new government data released Thursday.
That was the Dow’s biggest percentage gain of 2022.
Also, U.S. drugmaker Regeneron will update investors with results from the 2023 American Society of Hematology (ASH) conference. Computer graphic software maker Adobe could shed light on consumers’ appetite for AI products with its earnings report on Thursday, which comes after it introduced new AI tools for Photoshop and other products this year. Database software seller Oracle will release earnings on Monday. On Wednesday, the Producer Price Index (PPI) will show wholesale prices for business, another inflation indicator. Surging home prices have changed everything about U.S. housing.
What to Expect in the Markets This Week
Andrew Patterson, senior international economist at Vanguard, told me he thinks rate cuts are unlikely until 2024. Patterson said the Fed — and investors — need to still be concerned about how so-called core inflation (excluding food and energy) has yet to cool dramatically. Barclays predicts that the central bank will lower rates by a quarter of a point at each of its last three meetings in 2023. The publication of the rates could also help guide investor action in the future, as its “dot plot” serves to indicate where Fed members think the interest rate should be set at upcoming meetings.
The Dow was down 550 points early on in the trading session. But the severe sell-off might have been overdone. Another decline in inflation would meet consumer expectations, with the most recent Michigan Consumer Sentiment Index showing that the public believes price increases will continue to slow over the near and long term. Stocks deflated Thursday following the inflation report, but there were a handful of blue chip companies holding up well. Three in particular were solidly in green thanks to strong earnings.
Powell on Recent Inflation: ‘Are They More Than Bumps?’
Even though the hotter-than-hoped-for inflation report is sparking fears of more big rate hikes from the Federal Reserve, some optimists are starting to see light at the end of the Fed tightening tunnel. Investors focused more on strong earnings from the likes of Delta (DAL), Dow component Walgreens (WBA) and Wall Street giant BlackRock (BLK). All 30 Dow stocks finished in green and nearly all of the S&P 500 members closed higher, led by strong gains from materials, energy and financial stocks. Investors will also get a look at some retail sectors, with an earnings report from Costco and an investor call with pet-products seller Chewy.
If those gains hold, the Dow will wind up with its biggest percentage and points gains of 2022, topping a 2.8% jump from early May. It needs to go up more than 932 points for it to be the largest point increase. The latest reading of the Consumer https://www.topforexnews.org/investing/8-smart-ways-to-grow-your-money/ Price Index on Tuesday will be another step toward answering that question, as economists will be looking to see whether inflation continues its downward trend. More debt, different buyers and increased regulation pose challenges.
Mortgage rates have more than doubled in the past year as the Federal Reserve pushed ahead with its unprecedented campaign of hiking interest rates in order to tame soaring inflation. The combination of the central bank’s rate hikes, investor’s concerns about a recession and mixed economic news has made mortgage rates volatile over the past several months. Fewer earnings reports are scheduled this week, as earnings season has largely concluded, but there are a few tech companies scheduled to report. Intel will be the latest chipmaker to host a launch event that points toward its AI offerings. Stocks were soaring in midday trading Thursday, despite the fact that the consumer price index rose more than expected. All 30 Dow stocks were higher, with the energy and financial sectors posting the biggest gains.
Last month’s CPI also looked better, with inflation dropping to 3.2% from 3.7%. Gold buying in the country has helped fuel a recent surge—and could protect against a downturn. Delta (DAL) shares also took flight, thanks to solid sales and a robust outlook. Drugstore giant Walgreens (WBA) was one of the few Dow winners, gaining 3% after reporting a better-than-expected profit and healthy guidance for 2023. Prices at the grocery store continued to soar last month, adding even more pressure to shoppers’ wallets. Some traders were suggesting that the market may (finally) have hit bottom after the S&P 500 briefly dipped below the key 3,500 level before rebounding.
There’s also a staff report on the U.S. economic outlook that can show what assessments Federal Reserve officials are considering. After taking a breather last week, mortgage rates rose again — moving even closer to 7%. Stocks staged a dramatic turnaround Thursday, bouncing back from significant losses at the start of trading and finishing sharply higher. Investors were disheartened at first by the Consumer Price Index report, which showed continued inflation pressures. That added to fears that multiple big rate hikes from the Federal Reserve could be ahead. For the second straight week, a chipmaker will host an event to debut new technology and tout the AI power of its products.
Consumer, Wholesale Price Data to Show Path of Inflation.
It just goes to show that even in a bear market and with recession fears swirling due to concerns about uber-aggressive rate hikes from the Fed to try and stomp out inflation, investors still need to focus on fundamentals. There are always buying opportunities somewhere. “We continue to see a tale of two economies in the data,” said Sam Khater, Freddie Mac’s chief economist. “Strong job and wage growth are keeping consumers’ balance sheets positive, while lingering inflation, recession fears and housing affordability are driving housing demand down precipitously.” Shelter costs make up a big chunk of the consumer price index.
On Thursday, it’s Intel’s “AI Everywhere” launch, where the company will launch its fifth-generation Xeon processors for data centers and Core Ultra processors for laptops. The event comes after Advanced Micro Devices (AMD) held a similar launch event last week, helping move its share price up by more than 7%. He said the https://www.day-trading.info/the-most-traded-currencies-in-the-world/ next several months will undoubtedly be important for the economy and the housing market. Already, home sales are dropping and prices are cooling as well. The pizza king’s sales topped forecasts, even though the strong dollar ate into revenue a bit. Domino’s shares rose 9%, making it the top performer in the S&P 500.
The average mortgage rate is based on a survey of conventional home purchase loans for borrowers who put 20% down and have excellent credit, according to Freddie Mac. But many buyers who put down less money up front or have less than 6 trading strategies every trader should know 2020 perfect credit will pay more. The most recent readings have been promising, as the Personal Consumption Expenditures (PCE)—the Federal Reserve’s preferred inflation gauge—showed inflation falling to 3% year-over-year in November.