US stocks open firmer on mild expense boost relief, but more tests are still ahead
Medora Lee
U.S. stocks opened higher after a chilly expense boost update eased fears for now that expense boost is ticking back up.
The producer worth index (PPI), a assess of wholesale prices, rose 0.2% in December from the prior month, the Bureau of Labor Statistics said. That was less than Dow Jones’ average economist approximate for a 0.4% jump. The monthly core rate, which excludes the volatile food and vigor sectors, was flat.
“PPI reminds people that we’re still in a period of moderating prices and falling rates,” said David Russell, global head of economy schedule at online buying and selling platform TradeStation. “It vindicates the Fed’s selection to ease last year and restores some aspiration of a second rate cut. Dropping food prices are also welcome information for the incoming Trump Administration.”
Around 10:30 AM ET, the broad S&P 500 index added 0.28%, or 22.32 points, to 5,858.54, the blue-chip Dow rose 0.46%, or 193.63 points, to 42,490.75 and the tech-heavy Nasdaq gained 0.54%, or 102.84 points, to 19,190.94. The standard 10-year Treasury gain was at 4.801%.
expense boost caution remains
Even with the better-than-expected PPI, all eyes will be on customer expense boost, or what everyday Americans pay for goods and services, economists said.
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“Friday’s exceptionally powerful jobs update seems to have woken up the expense boost worriers from their hibernation,” said BeiChen Lin, capital strategist at money manager Russell Investments. “Even a mildly hotter than expected expense boost update could factor a sell-off in bonds and equities.”
A warm expense boost update could add to the argument the Federal safety net should keep rates higher for longer, economists said. Higher rates make borrowing more expensive and leisurely the economy and corporate profits, while expense boost eats away at debt safety returns.
Economists, on average, approximate the annual customer worth index (CPI) to have been up 2.8% in December from 2.7% the prior month, FactSet said. The annual core rate is expected to remain steady at 3.3%.
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Corporate information
In other information, major U.S. banks like JP Morgan, Wells Fargo, Citigroup and Goldman Sachs are slated to update quarterly results on Wednesday. That should provide investors the first glimpse of how companies and consumers are faring, analysts said. Banks can provide a firsthand look at demand for loans, capitalization card usage, capitalization standard as well as propose an outlook for how President-elect Donald Trump’s policies may play out for the economy.
- Bitcoin jumped, pulling bitcoin-holder Microstrategy, crypto swap Coinbase and miner Riot Platforms higher. Around 10:25 AM ET, bitcoin was up more than 2% at $96,756.04.
- Tesla shares are almost 3% higher after reports said China is considering a sale of Tik Tok to Telsa founder Elon Musk. The U.S. said it would ban TikTok in the U.S beginning on Jan. 19, unless its Beijing-based parent, ByteDance, divests itself of the operation.
- Eli Lilly tumbled nearly 7% after the business gave a disappointing profits outlook, citing slower-than-expected growth in sales of its weight-setback drugs.
Medora Lee is a money, markets, and money management reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for money management tips and business information every Monday through Friday morning.
