US futures still nailed around parity on Wall Street, on Inflation Day made in the USA.
Today will be a crucial day for Wall Street and, consequently, for global equities. From the American macro front, the consumer price index (CPI) for December will be announced.
Positive performance yesterday for the US stock market: the Dow Industrial Average closed up 268.75 points (+0.8%), at 33,973
points; the S&P 500 rose 50.34 points (+1.2%) to 3969.60 points, while the Nasdaq jumped for the fourth consecutive session, up 1.76% to 10,931.68.
The caution of investors awaiting the data relating to US inflation is evident. The sentiment is however slightly positive: at around 1.50 pm Italian time, futures on the Dow Jones, the S&P 500 and the Nasdaq report increases of around 0.16%, 0.18% and 0.10%. Interest rates on US Treasuries seem to bet on the weakening of inflation: 10-year rates fall to 3.517%, while two-year rates are down to 4.22%.
There is someone who is optimistic about the fact that is about to be published.
This is the case of Jeff Buchbinder, chief equity strategist of LPL Financial who, in a note reported by CNBC, said that, in his opinion, “inflation should continue to fall, allowing the Fed to put an end to rate hikes in the spring, in support of corporate profits”.
The CPI index will give important indications on the inflation trend in the United States, providing signals on the possible next moves by Jerome Powell’s Fed, in particular on the extent of the next rate hike, which could be 50 basis points or 25 basis points basis, according to market operators.
Economists polled by Bloomberg expect a headline CPI consumer price index up 6.6% year-on-year in December, up from +7.1% in November, and a virtually flat month-on-month trend.
The core CPI is also expected to slow on an annual basis, up 5.7% in December after 6% in December.
On a monthly basis, the core component of the US consumer price index is instead expected to strengthen by 0.3%, after +0.2% in November.
On Wall Street, the attention of investors has been directed in recent days to the statements of some Fed officials.
San Francisco Fed Chair Mary Daly said she believes the Federal Reserve will raise fed funds rates to above 5%, while Atlanta Fed Chairman Raphael Bostic stressed that, in his view, the bank Central America led by Jerome Powell should raise rates above the 5% threshold by the beginning of the second quarter of this year, and then keep them at that level ‘for a long period of time’.
Even more hawkish are the forecasts of Jamie Dimon, number one at JP Morgan, who said he believes that the Fed’s terminal rate could even be confirmed at 6%.