By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- Inflation will be center stage this week with the release of both producer prices (PPI) and consumer prices (CPI) on Tuesday and Wednesday, respectively. On a year-over-year basis, PPI is expected to accelerate to 3.5% (3.8% core) and core CPI is expected to remain unchanged at 3.3%, while overall CPI is forecast up 2.9% versus 2.7% previously. The higher inflation readings would be consistent with growing price pressures in the Institute for Supply Management surveys released earlier this month.
- Other economic data/events this week include the U.S. Federal Reserve’s Beige Book on regional U.S. economic activity, housing starts, industrial production and the retail sales update for December 2024. The industrial production index currently sits below the levels prior to the 2008-2009 Global Financial Crisis.
- Fourth-quarter earnings start rolling in this week, with major financial institutions JPMorgan, Citi, Wells Fargo and Goldman Sachs first to report. Recent economic data has been strong and companies are eager to hire, boding well for earnings.
Three Things to Know
- While it is much too early to know the full extent of the damage, The L.A. wildfires have officially spread over 40,000 acres with insurance losses crossing $20 billion. Since the market closed on Friday, estimated damages have tripled to $150 billion. (Source: The Kobeissi Letter)
- This week we saw the largest inflows into money market funds since April 2020. That was exactly the beginning of the greatest 52-week period in stock market history. (Source: All Star Charts)
- Employment report data shows that over the past 18 months, the economy has added 3.5 million new jobs (Establishment Survey) but has shed 1.3 million full-time workers (Household Survey). (Source: Willie Delwiche)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.