Core Viewpoint - The article discusses the moderate inflation data in the U.S. for December, highlighting a significant rise in food prices and stable prices for goods related to tariffs, while also noting a rebound in rent and core inflation in the service sector. The analysis suggests that the Federal Reserve is unlikely to lower interest rates in January due to the current inflation trends and labor market conditions [2][6]. Inflation Data Summary - The U.S. Consumer Price Index (CPI) rose by 2.7% year-on-year in December, aligning with market expectations, while the core CPI increased by 2.6%, falling short of expectations [2]. - Food prices saw a notable seasonally adjusted month-on-month increase of 0.7%, the highest since 2022, driven by rising prices in dairy products (+0.9%), fruits and vegetables (+0.5%), and other household foods (+1.6%) [3]. - Energy prices increased by 0.3% month-on-month, with natural gas prices rising by 4.4%, while gasoline and fuel prices decreased by 0.5% and 1.5%, respectively [3]. Impact of Tariffs and Cost Management - The impact of Trump's tariffs on inflation has been milder than previously feared, as supply chains and retailers absorbed some costs. This has hindered the downward transmission of durable goods prices, making it difficult to pass on costs to consumers [4]. - There is a concern that companies that have previously absorbed costs without raising prices may eventually increase prices, contributing to inflationary pressures [4]. Rent and Housing Market Insights - Rent prices have rebounded, with the Owner's Equivalent Rent (OER) and primary residential rent increasing from 0.1% to 0.3% month-on-month, indicating a return to normal levels [4][10]. - Despite a cooling labor market and reduced rental demand due to immigration policies, rent inflation is expected to remain moderate, with no signs of a significant downturn in rental prices [4]. Service Sector Inflation Trends - Non-rent core service inflation (supercore) rebounded, with a month-on-month increase from 0% to 0.3%, indicating a recovery in service activities following the government reopening [5]. - Prices related to travel, such as airfare (+5.2%) and hotel accommodations (+3.5%), showed strong increases, while communication services experienced significant price drops, particularly in wireless services due to competitive pricing strategies among major carriers [5]. Federal Reserve's Interest Rate Outlook - The moderate inflation data is insufficient for the Federal Reserve to consider another rate cut in January, especially after three rate cuts in 2025 that brought the policy rate close to neutral levels [6]. - The labor market, while cooling, has not deteriorated significantly enough to warrant a rate cut, and there are concerns about the perception of political interference if the Fed were to lower rates prematurely [6].

Market Overview - US stock futures retreated with Nasdaq 100 down 0.5%, S&P 500 down 0.4%, and Dow Jones Industrial Average down 0.3% as financial stocks pulled Wall Street indexes off record highs [1] - Investors are closely monitoring inflation data, potential Supreme Court rulings on tariffs, and US military actions regarding Iran [1][2] Banking Sector - Bank of America reported a surge in profit driven by increased trading activity, beating fourth-quarter earnings expectations [6][7] - Wells Fargo's profit fell short of Wall Street estimates due to severance costs from a headcount reduction of 5,600 [7] Inflation and Economic Data - Upcoming producer price index data is expected to provide insights into wholesale inflation, while retail sales figures for November will indicate consumer spending trends [4] Precious Metals - Gold and silver prices reached record highs, with silver briefly surpassing $90, driven by geopolitical tensions and expectations of Federal Reserve rate cuts [5][20] International Markets - Global investment firms are increasing their investments in Chinese stocks and the yuan, citing favorable valuations and supportive policies [14][15] - BP announced it expects to write down up to $5 billion from its green energy businesses, contributing to a total of around $20 billion in writedowns over the past two years [18]

Financial Sector - Major banks including Bank of America, Wells Fargo, and Citigroup are set to report earnings, following JPMorgan Chase's disappointing results which led to a sell-off in its shares [2] - President Trump is exerting pressure on financial institutions with a proposal for a one-year cap of 10% on credit card interest rates, impacting shares of Visa and Mastercard [4] Chinese Market - Global investment firms have increased their positive outlook on China's equities market, citing attractive valuations and supportive policies [6] - The yuan has recently breached the key 7-per-dollar level, with predictions of it strengthening to 6.25 this year, supported by firms like Citigroup and Bank of America [7] - A recent rally in both Chinese stocks and currency has restored confidence in the market, with signs of resilience in exports and factory activity [8] Energy Sector - BP has announced it expects to write down up to $5 billion from its green energy businesses, contributing to a total of around $20 billion in writedowns over the past two years [9][10]

US stocks retreated on Wednesday as more big bank earnings rolled in, with investors on watch for fresh inflation data, a potential Supreme Court ruling on US tariffs, and signs of potential US military action on Iran. The tech-heavy Nasdaq Composite (^IXIC) slid 0.8%, while the S&P 500 (^GSPC) fell nearly 0.6%. Meanwhile, the Dow Jones Industrial Average (^DJI) moved down around 0.2%, coming off a pullback in financial stocks that dragged Wall Street indexes off record highs. Worries rose about US acti ...

US stocks retreated on Wednesday as investors weighed the latest big bank earnings and economic data, while on alert for a potential Supreme Court ruling on US tariffs as well as a US response to unrest in Iran. The tech-heavy Nasdaq Composite (^IXIC) sank 0.8%, while the S&P 500 (^GSPC) fell nearly 0.6%. Meanwhile, the Dow Jones Industrial Average (^DJI) moved down around 0.2%, coming off a pullback in financial stocks on Tuesday that dragged Wall Street indexes off record highs. Worries about US actio ...

Group 1: Market Overview - US stock futures retreated with Nasdaq 100 down 0.6%, S&P 500 down 0.4%, and Dow Jones Industrial Average down 0.3% as financial stocks pulled back from record highs [1] - Investors are closely monitoring inflation data, potential Supreme Court rulings on tariffs, and US military actions regarding Iran [1][2] Group 2: Company Earnings - Bank of America and Wells Fargo reported a surge in profits driven by increased trading activity [3] - Citigroup's stock rose significantly due to an 84% increase in financial advisory fees [3] - JPMorgan Chase's earlier earnings report was considered underwhelming, setting a cautious tone for the earnings season [3] Group 3: Economic Indicators - Wholesale inflation data was muted, supporting expectations that the Federal Reserve will maintain interest rates in January [4] - Retail sales exceeded expectations in November, indicating stronger consumer spending [4] Group 4: Precious Metals Market - Gold and silver prices reached record highs, with silver briefly surpassing $90, driven by expectations of further Fed rate cuts and rising geopolitical tensions [5] Group 5: Legal and Regulatory Environment - The Supreme Court is expected to release opinions on a challenge to Trump's tariff-setting authority, which has been framed as a national security issue [6]

Bitcoin extended gains on Tuesday, climbing to a two-month high as U.S. corporate earnings got underway and investors absorbed fresh inflation data. The world’s largest cryptocurrency was up about 4.5% on the day, trading just above $95,500—its strongest level since mid-November, according to CoinGecko. The advance triggered an estimated $587 million in liquidations of crypto short positions, including about $292 million tied to Bitcoin, according to CoinGlass. "Over the past week and a half, we’ve witne ...

Market Overview - The Dow Jones led a market retreat from recent highs, with financials and software sectors experiencing declines [4][5] - Google and other AI-related stocks are noted to be performing well despite the overall market downturn [4] Economic Indicators - The ongoing dispute between President Trump and Federal Reserve Chair Jerome Powell regarding interest rates is expected to continue, potentially impacting market sentiment [4] - Recent inflation data has influenced investor behavior, contributing to the market's reaction [7] Company-Specific News - Delta Air Lines has announced a deal with Boeing and provided guidance for 2026 amid increasing demand [6] - JPMorgan and Bank of New York Mellon have reported diverging earnings results, indicating varied performance within the banking sector [7] - The upcoming earnings season is highlighted by key companies such as JPMorgan, Goldman Sachs, and Taiwan Semiconductor [9]

Core Insights - Financially-stressed middle-class families are unlikely to find relief in the latest Consumer Price Index (CPI) report, indicating ongoing economic challenges for this demographic [1] Group 1 - The latest CPI report suggests that inflation continues to impact middle-class families, with no significant relief in sight [1] - The report highlights persistent financial strain on middle-class households, which may affect consumer spending and overall economic growth [1]

Core Viewpoint - Jamie Dimon, CEO of JP Morgan, has expressed concerns that Donald Trump's attacks on Federal Reserve Chair Jerome Powell could jeopardize the independence of the central bank, potentially leading to increased interest rates and inflation [1][3]. Group 1: Federal Reserve and Investigations - Dimon has shown "enormous respect" for Powell, who is currently under a controversial criminal investigation by the US Department of Justice regarding alleged misuse of taxpayer funds related to a $2.5 billion renovation of the Fed's headquarters [2]. - Powell has condemned the investigation as retaliation for not aligning interest rate decisions with the preferences of the President [2]. Group 2: Central Bank Independence - Dimon emphasized the importance of Federal Reserve independence, stating that any actions undermining it could have adverse effects, including raising inflation expectations and increasing interest rates over time [3]. - A coalition of ten central bank governors, including those from the Bank of England and the European Central Bank, has publicly supported Powell amid Trump's criticisms [4]. Group 3: JP Morgan's Financial Performance - JP Morgan reported a 7% decline in fourth-quarter profits, amounting to $13 billion, attributed to a one-off cost from acquiring a credit card partnership with Apple, previously held by Goldman Sachs [6]. - The announcement of this deal coincided with Trump's call for a 10% cap on credit card interest rates, which has negatively impacted shares of major credit card providers [6]. Group 4: Market Conditions and Risks - The credit card market is described as highly competitive, with potential regulatory caps posing risks not only to company profits but also to consumer access to credit, particularly affecting those in need [8]. - JP Morgan's CFO indicated that the company is preparing for various contingencies in light of these market dynamics [7].