U.S. CPI Data Showed Consumer Prices Rose Less than Expected in November

Stronger-than-expected producer-price data prompted jitters about the inflation outlook last week, dragging all three indexes lower. Investors are hoping the economic outlook is more benign this week. Also, hopes that the Fed is winning the fight against inflation helped indexes to rally for most of November, sending the broad S&P 500 to a 3-month high. Data indicated the presence of signs that inflation is perhaps easing, raising expectations that Fed officials would be better positioned to slow the pace of their interest-rate hikes.

Today’s stock-index futures inched higher, welcoming the just published inflation data. The U.S. Labor Department’s CPI data showed Consumer prices rose less than expected in November, up 7.1% from a year ago and slower than the previous month’s 7.7% rise. The core CPI remained unchanged monthly pace of 0.3% and an annual rate of 6.1%, down from 6.3% in October.

Yesterday, The S&P 500 gained about 56 points, or 1.4%, to 3990 and the Dow Jones Industrial Average added 529 points or 1.6%, to 34005. The Nasdaq Composite rose 139 points, or 1.3%, to 11144. The indexes edged higher at the open, and then gained steam through Monday’s session and rallied into the close.

Commoditywise, crude oil futures, having broke a 5-session losing streak yesterday, are reliably advancing today. A barrel of WTI crude oil traded up 1.33% at $74.26 as of 3:00 p.m. CET, while Brent Crude Oil at almost $80/bbl. OPEC+ is due to release its monthly oil report any time at the U.S. market open. The demand and supply projections made in the report could undermine the rising sentiment.

The major European markets initially showed nervousness in today’s trading, but thereafter spearheaded. At the time of writing, the British FTSE is edging higher by 0.75%, German stocks rose by 1.86%, while France’s CAC 40 jumped up by 1.7%. The Pan-European Stoxx 600 staged a full-blown upswing, adding 1.6% at the time of writing. The European Central Bank and the Bank of England are due to meet and decide on interest rates on Thursday.

Asia-Pacific stocks closed today’s session on a mixed note amid caution, as the Chinese, Malaysian, Taiwanese and South Korean markets lost ground, while the Japanese, Indonesian, Australian and Indian markets managed to end in the green.

Japan said it will increase the annual limit on tax-free investment accounts and expand the amount that people may invest over a lifetime to 18 million yen ($131,000). Also, Japan’s financial regulator is conducting the banking stress tests by examining how vulnerable lenders would be to a sudden slump in government bonds should the nation’s central bank pivot away from its ultra-loose monetary policy in the future.