By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The Consumer Price Index (CPI) for November will be released on Wednesday and should help set the tone for the markets into year-end. CPI and core CPI are both expected up 0.3% month- over-month and 7.3% and 6.1% year-over-year, respectively. That would reinforce the narrative that inflation has peaked and would leave the Fed room to raise rates 50 basis points as opposed to 75 basis points at the December meeting.
- The Fed concludes a two-day meeting Wednesday afternoon and the consensus (based on the futures market) is that the Fed will increase interest rates 50 basis points as opposed to 75 basis points as it has done so far through 2022. This week’s CPI report and Fed meeting will set the tone for the balance of the year.
- Two themes to watch closely will be tax-loss selling and liquidity. Just about every major market is down this year providing tax-loss selling opportunities and we are headed into the time of year where liquidity is constrained as traders look to close the books on the year.
Three Things to Know
- After benefiting from a shortage of new cars due to supply chain issues, used car prices have started to fall. In February. The year- over-year rate of change for used car prices peaked at 41.2% versus just 2% last month. (Source: Haver)
- John Scott Harrison is the only person to watch both his father and son become president of the United States. He was the son of President William Henry Harrison (ninth president) and the father of President Benjamin Harrison (23rd president). (Source: Wikipedia)
- Over the last five interest rate cycles, the average time that the Fed funds rate held at the peak rate for the Federal Reserve was 11 months. (Source: Ciovacco Capital)
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.