November Inflation Data Takes Center Stage Ahead of Fed Meeting: Will Disinflation Excitement Persist?
Portfolio Pulse from Piero Cingari
The upcoming release of the November Consumer Price Index (CPI) data is highly anticipated as it coincides with the Federal Open Market Committee (FOMC) meeting. Economists expect the annual CPI inflation rate to ease to 3.1% from October's 3.2%, potentially marking the slowest rate since June. Core CPI is forecasted to remain at 4% annually. The previous CPI release led to a rise in SPY and QQQ, while TLT fell and UUP tumbled. The December FOMC meeting will also update economic projections, contrasting with market expectations of rate cuts by 2024.
December 11, 2023 | 2:25 pm
News sentiment analysis
Sort by:
Descending
POSITIVE IMPACT
QQQ, which tracks the NASDAQ-100, saw a 0.45% increase after the last CPI data. Similar CPI expectations may result in a short-term positive impact on QQQ.
QQQ is sensitive to inflation data due to its tech-heavy composition. A report indicating controlled inflation could lead to a positive market response, potentially benefiting QQQ in the short term.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
SPY rose by 0.4% following the October CPI data release. If the November CPI data aligns with expectations, it could lead to a similar short-term positive impact on SPY.
SPY, which tracks the S&P 500, often reacts to economic indicators like CPI data. A continuation of disinflation could boost investor sentiment, potentially leading to a rise in SPY in the short term.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
TLT experienced a 0.8% decrease after the October CPI data. The upcoming CPI release could similarly impact TLT in the short term.
TLT, which tracks long-term Treasury bonds, typically moves inversely to inflation expectations. If the CPI data suggests continued disinflation, it could lead to a decrease in TLT as investors may anticipate less aggressive rate hikes.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
UUP tumbled by 1.6% following the last CPI data. The upcoming CPI report could have a similar short-term negative impact on UUP.
UUP, which tracks the US dollar index, may decline if the CPI data indicates a slowing inflation rate, as this could reduce the likelihood of aggressive rate hikes by the Fed, diminishing the dollar's appeal.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80