Market Musings 1/15/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets surge as easing inflation reignites rally.
Markets returned to its optimistic self after back-to-back days of cooling #Inflation data.
On Tuesday, the Producer Price Index showed wholesale inflation slowed to 0.2% M/M in December with the core even lower at 0.1% M/M. Both significantly below both the prior month and expectations.
Then Wednesday, the Consumer Price Index had overall inflation rise to 0.4% M/M, but core finally fell to 0.2%. While the overall was higher, core inflation finally broke a 4-month streak of higher 0.3% M/M readings.
Markets cheered the data with the S&P 500 surging 1.8% on Wednesday.
Bets on #RateCuts also took a step forward. A January cut is still likely off the table, but odds for two cuts this year instead of one increased.
While we’re definitely happy to see a break thru, but we don’t think we’re out of the woods yet. The Fed took 4 months to recognize the stalled #Inflation progress. One better month is unlikely to significantly shift their position yet, but it’s start.
We still see a lot of uncertainty with new administration policies incoming that’ll likely keep #RateCuts a guessing game at least until the second half of the year.
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Original Photo by Pixabay.