Last week’s market rally continued this week lifted by a weaker December inflation number and hopes that the FED is nearly finished with rate hikes. This came despite some FED member predictions that there are more rate hikes to come. All major indices saw substantial gains. The headline Consumer Price Index was negative for December mainly due to lower energy prices. However, clothing and shelter costs continued to rise substantially.
Q4 earnings releases have started, and several large banks reported on Friday. Generally, these earnings were positive but the forecasts for 2023 were negative.
Treasury bond yields fell with the 30-year bond at 3.614% and the 10-Year note at 3.230%. 30-year mortgage rates fell to 6.33%. Crude oil rose to $80.06 a barrel and natural gas fell to $3.446 per MMBTUs. The U.S. dollar index fell to 102.18 and gold rose to $1923 an ounce.
- China reported:
- Consumer prices rose 1.8% from a year earlier in December, up from 1.6% in November.
- Producer prices fell 0.7% year over year, up from a 1.3% decline in November.
- The trade surplus expanded 29.7% in calendar year 2022.
- Exports rose 7%.
- Imports rose 1.1%.
- Exports to the U.S. rose 1%.
- Imports from the U.S. fell 1%.
- In December exports fell 10.1% from a year earlier following a 9% decline in November as zero covid and U.S. interest rate hikes took hold.
- The UK reported gross domestic product growth in the month of November of 0.1% following a 0.5% rise in October. Over the three month period ending in November GDP fell 0.3%.
- The Commerce Department reported that wholesale inventories rose 1.0% in November. From a year ago, wholesale inventories have risen 20.9% as supply chains recover.
- The Labor Department reported:
- Consumer prices fell 0.1% in December.
- Excluding volatile food and energy, prices rose 0.3%.
- Energy prices fell 4.5% in December.
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- Gasoline fell 9.4% but natural gas supplied by utilities rose 3.0%.
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- Shelter costs rose 0.8%. Both rents and owner equivalent costs rose 0.8%.
- Clothing costs rose 0.5%.
- Energy prices fell 4.5% in December.
- From a year earlier, consumer prices rose 6.5%, down from 7.1% in November.
- Excluding volatile food and energy, core prices have risen 5.7% year over year.
- Excluding volatile food and energy, prices rose 0.3%.
- Seasonally adjusted first-time claims for unemployment were 205,000, down from a revised 206,000 in the prior week.
- Consumer prices fell 0.1% in December.
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- The 4-week moving average of claims, designed to smooth out volatility, was 212,500 down from a revised 214,250 in the prior week.
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
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- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil rose from 12.1MM to 12.2MM BPD.
- Natural gas storage rose 11BN cubic feet and is about at the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs rose 5 to 623. The number of active natural gas rigs fell 2 to 150.
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Thank you,
Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O. 269-441-4143 517-795-2025
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.
