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Markets Close Higher Ahead of Tuesday's CPI Report
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Market indices hit the closing bell strongly in the green for this first trading day of the week. After starting the day flat and overcoming a slight mid-afternoon swoon, the Dow gained +377 points, +1.11% and the Nasdaq was +173 points or +1.48% (now an eye-popping +13.6% year to date). The S&P 500 saw 10 of its 11 sectors move higher on the session (Energy the only outlier) while the small-cap Russell 2000 grew +1.16% for the day.
With a potentially consequential Consumer Price Index (CPI) report out tomorrow morning, we see market participants positioning themselves ahead of what they expect to see in this important inflation metric. Expectations are mixed for tomorrow’s report: headline CPI is expected to rise a half point from -0.1% reported for December to +0.4% last month. Meanwhile, year over year is expected to come down 30 bps on both headline and core.
Headline CPI year over year is also referred to as the Inflation Rate, and +6.2% is the consensus number for tomorrow’s January print — down from +6.5% the previous month and +7.1% back in November. It would, in fact, be the seventh consecutive month lower, as well as the lowest headline since October 2021. Core CPI (stripping out volatile food and energy prices) is expected to reach +5.4% from +5.7% the previous month, and would also represent the lowest level since late ’21. Core CPI month over month is expected to be flat with the previous month’s +0.3%.
Meanwhile, earlier today we saw some inflation projections from the New York Fed for January, which predicts 1-year inflation in-line with December at +5.0%. The 3-year and 5-year prints came in slightly above expectations, to +2.7% and +2.5%, respectively. Food and gas prices are anticipated to lead inflation metrics higher, with rent and medical care unchanged month over month but still very high. Labor earnings growth for the next year remains +3.0%, with job firings and quits both coming down slightly over the next year.
Specialty software company Palantir (PLTR - Free Report) broke a four-quarter negative earnings streak by beating expectations by a penny on its bottom line: 4 cents per share versus 3 cents, on $509 million in revenues that surpassed the Zacks consensus $506 million. The intelligence community software firm cited +67% growth in its commercial business on artificial intelligence supplies to the U.S. military. There is also some buzz from CEO Alex Karp that larger firms may be interested in acquiring Palantir, and this has sent shares +20% in late trading — doubling the company’s gains year to date so far.
Image: Bigstock
Markets Close Higher Ahead of Tuesday's CPI Report
Market indices hit the closing bell strongly in the green for this first trading day of the week. After starting the day flat and overcoming a slight mid-afternoon swoon, the Dow gained +377 points, +1.11% and the Nasdaq was +173 points or +1.48% (now an eye-popping +13.6% year to date). The S&P 500 saw 10 of its 11 sectors move higher on the session (Energy the only outlier) while the small-cap Russell 2000 grew +1.16% for the day.
With a potentially consequential Consumer Price Index (CPI) report out tomorrow morning, we see market participants positioning themselves ahead of what they expect to see in this important inflation metric. Expectations are mixed for tomorrow’s report: headline CPI is expected to rise a half point from -0.1% reported for December to +0.4% last month. Meanwhile, year over year is expected to come down 30 bps on both headline and core.
Headline CPI year over year is also referred to as the Inflation Rate, and +6.2% is the consensus number for tomorrow’s January print — down from +6.5% the previous month and +7.1% back in November. It would, in fact, be the seventh consecutive month lower, as well as the lowest headline since October 2021. Core CPI (stripping out volatile food and energy prices) is expected to reach +5.4% from +5.7% the previous month, and would also represent the lowest level since late ’21. Core CPI month over month is expected to be flat with the previous month’s +0.3%.
Meanwhile, earlier today we saw some inflation projections from the New York Fed for January, which predicts 1-year inflation in-line with December at +5.0%. The 3-year and 5-year prints came in slightly above expectations, to +2.7% and +2.5%, respectively. Food and gas prices are anticipated to lead inflation metrics higher, with rent and medical care unchanged month over month but still very high. Labor earnings growth for the next year remains +3.0%, with job firings and quits both coming down slightly over the next year.
Specialty software company Palantir (PLTR - Free Report) broke a four-quarter negative earnings streak by beating expectations by a penny on its bottom line: 4 cents per share versus 3 cents, on $509 million in revenues that surpassed the Zacks consensus $506 million. The intelligence community software firm cited +67% growth in its commercial business on artificial intelligence supplies to the U.S. military. There is also some buzz from CEO Alex Karp that larger firms may be interested in acquiring Palantir, and this has sent shares +20% in late trading — doubling the company’s gains year to date so far.
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