Inflation is hot, but so is the market this year

Employees work on the floor of Vanson Leathers’ New Bedford plant on September 26.

Ryan Turner | The Boston Globe | Getty Images

This report comes from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open keeps investors updated on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

The market is red
US market It retreated on Thursday as investors assessed higher-than-expected wholesale inflation data. The pan-European Stoxx 600 fell 0.14% as the region’s central banks cut interest rates. shares Brunello Cucinelli Shares of the Italian luxury brand rose 8% after it raised its annual forecast for 2024.

U.S. producer prices remain hot
U.S. producer prices rose 0.4% in November, above the Dow Jones consensus estimate of 0.2%. On an annual basis, PPI rose 3%, the highest increase in the 12 months to February 2023.

Inflation cools in India
India’s overall inflation rate in November was 5.48%, lower than the 5.53% expected in a Reuters survey and 6.21% in October. The data came after disappointing quarterly economic growth and the appointment of a new central bank governor, raising hopes that the Reserve Bank of India might cut interest rates at its next meeting in February.

European Central Bank cuts interest rates
On Thursday, the European Central Bank cut its key interest rate to 3%, with a 25 basis point cut expected. The bank also lowered its 2024 economic growth forecast for the euro zone to 0.7% from the previous 0.8%, and lowered its 2025 economic growth forecast from 1.3% to 1.1%.

(PRO) Tom Lee makes his 2025 predictions
Fundstrat’s Tom Lee has a history of getting things right. Not only did he complete this year’s rally; S&P 500 Index A rebound will occur in 2020, following the pandemic-induced collapse earlier in the year. Lee laid out his predictions for the stock market and Bitcoin in 2025.

bottom line

The U.S. producer price index, which measures wholesale price gains, was higher than expected on Thursday. A day earlier, the U.S. Consumer Price Index showed annual inflation rose in November from the previous month.

The numbers can be a little hard to handle, and the market doesn’t want inflation to pick up.

The rate of return is 10 Year Treasury Bill – affecting long-term interest rates such as mortgages and corporate loans – jumped to 4.334%.

Major stock indexes also fell. this S&P 500 Index Down 0.54% Dow Jones Industrial Average It fell 0.53%, falling for the sixth consecutive day. this Nasdaq Index Dragged down by the decline in technology stocks, it fell below 20,000 points, a decrease of 0.66%.

adobe The company’s shares fell 13.7%, their biggest drop in more than two years, after the company’s fiscal first-quarter revenue guidance disappointed.

That said, the Nasdaq could ease a bit the next day. Broadcom The company’s shares rose 14% in after-hours trading after the company released its earnings report, which showed the chipmaker’s artificial intelligence revenue grew 220% this year. Even before announcing better-than-expected earnings, Broadcom was already winning praise from analysts.

Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, said: “Broadcom was previously considered a value stock but can now be considered a growth stock. However, due to its continued dividend payments and growth, it is attractive to both. .

In fact, the company’s shares have soared 66.5% year to date, a figure that puts Broadcom among the top seven companies: Amazon grew by 52.7%, apple It rose 33.6% for the whole year.

So it’s important to keep in mind how sterling has performed in the stock market this year, even as investors wonder what it will take to get inflation numbers below the Fed’s 2% target.