November CPI report shows inflation coming down at 'glacial pace'

Inflation Analysis - Inflation is moving in the right direction, but perhaps not as fast as indicated in the report [5] - Shelter costs, a significant component of the consumer basket, are trending lower, supported by Zillow rent indices [2][3] - Imports account for 16% to 20% of goods, while goods excluding food and energy represent only about 20% of the consumer basket [3] - Inflation remains an issue, still a positive number and above the Federal Reserve's target [5][6] Investment and Market Outlook - The market anticipates 2026 to be a good period for the economy, influenced by various factors including starting valuations [7] - The focus is on whether firms can grow into their valuations, leading to a preference for small and mid-cap companies and value stocks [7] - A key aspect for the coming year is the return on invested capital, especially for investments in artificial intelligence and data centers [8] - The tax incentives in the "one big beautiful bill" are expected to drive significant investment spending in areas like data centers, buildings, computers, and machinery [8][9] - The market may react differently to economic news than expected, as seen in 2018 after the 2017 tax bill, where small caps underperformed despite initial expectations [10][12] - The next chapter in AI is about use cases and specific areas where a decent return on investment can be achieved, such as healthcare, the service sector, industrials, and logistics [16][17]