Traders work on the trading floor of the New York Stock Exchange on January 15, 2025 in New York City.
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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
Core CPI lower than expected
U.S. consumer price index rises on seasonally adjusted basis The U.S. Bureau of Labor Statistics reported a monthly increase of 0.4% in December, and the 12-month inflation rate was 2.9%. report Wednesday. The core inflation rate, which excludes food and energy prices, rose 0.2% from the previous quarter and rose 3.2% for the year. The full-year reading fell 0.1 percentage points from November. Both core readings also missed expectations by 0.1 percentage points.
Israel and Hamas reach ceasefire agreement
Israel and Hamas reached a ceasefire and hostage release agreement on Wednesday, ending a 15-month war in the Gaza Strip. Israel’s security cabinet still must vote on the deal before it can be implemented. U.S. President Joe Biden said the first phase of the deal, if approved, would include a comprehensive ceasefire and the withdrawal of Israeli troops from the densely populated Gaza enclave.
Markets have best day in months
U.S. stocks had their best day since November on Wednesday as inflation data fell short of expectations and U.S. Treasury yields fell. Pan-European Stoxx 600 Index It rose 1.33%, ending three consecutive days of losses and marking its best performance since August. UK government bond yields fell sharply after official data showed UK inflation fell to 2.5% in December.
JP Morgan profits beat expectations
JPMorgan Chase Announced substantial profit growth in the fourth quarter. During that period, the bank’s profits grew 50% to $14 billion, while revenue grew 10% to $43.74 billion. That was thanks to net interest income of $23.47 billion, nearly $400 million higher than StreetAccount’s forecast. JPMorgan executives said the bank will ramp up share buybacks despite Chief Executive Jamie Dimon saying in May the stock was expensive.
Goldman Sachs profits nearly double
Goldman Sachs Fourth-quarter profit beat expectations and trading revenue was stronger than expected. The bank said profits doubled from a year earlier to $4.11 billion, while revenue grew 23% to $13.87 billion. “There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Chief Executive David Solomon said on a conference call Wednesday.
(PRO) Be cautious when making profits next week
About 7% of the companies in the S&P 500 are due to report earnings next week. CNBC Pro sifted through companies reporting earnings next week, looking for companies with increasingly bearish analysts, and found six companies that had cut their profit forecasts in the past three months.
bottom line
Finally, a slew of good news for bulls, who have seen markets decline every week on lingering inflation concerns after a dismal start to the year.
Top of page: U.S. inflation fell below expectations in December. To be sure, headline inflation for the month was 0.1 percentage point higher than the Dow Jones consensus estimate.
But the Fed focuses more on core inflation because it strips out fluctuations in energy and food prices and more accurately reflects price changes in the economy. On a monthly and annual basis, core inflation was lower than expected.
In fact, as CNBC’s Jeff Cox puts it pointed out that “the main reason for the CPI increase was a 2.6% increase in energy prices during the month, which was driven by a 4.4% increase in gasoline prices. According to the U.S. Bureau of Labor Statistics (BLS), this accounted for approximately 40% of the index’s increase.”
John Kerschner, head of U.S. securitized products and portfolio manager at Janus Henderson Investors, said: “Today’s CPI data suggests that further rate hikes have been ruled out, and some market participants Already starting to digest this prematurely.
this U.S. 10-year Treasury bond yield Rates fell sharply as traders lowered their forecasts for interest rates, currently at 4.655%, compared with Friday’s close of 4.774%.
This gives stocks some breathing room. this S&P 500 Index up 1.83% Dow Jones Industrial Average up 1.65%, Nasdaq Index Soared 2.45%. It was the best day for the three major stock indexes since November 6.
Upbeat earnings reports from banks also added to the cheer. Their financial performance often serves as a predictor of the economy’s overall direction: When businesses and consumers engage in more financial activity, banks’ revenues grow, which in turn helps the economy grow.
The stars aligned Wednesday for investors. But just as the skies are constantly changing, volatility from new U.S. administrations and policies remains.
—CNBC’s Jeff Cox, Hakyung Kim and Lisa Kailai Han contributed to this report.
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