Consumer Prices, Core Prices, Sentiment: 3 Things to Watch By

© Reuters.

By Dhirendra Tripathi

– Stocks took a breather on Thursday as investors awaited the latest reading of inflation due out early Friday.

Apple (NASDAQ:AAPL) continued to rise, coming closer to a $3 trillion market valuation as it touched yet another 52-week high.

Pfizer Inc (NYSE:PFE) shares also gained after data showed its Covid-19 vaccine withBioNTech SE (NASDAQ:BNTX) offered protection against the Omicron variant, especially after three doses. The Food and Drug Administration added 16 and 17yos to the list of those eligible for booster doses.

Omicron has sent a jolt of volatility into the markets since it was first identified by scientists in South Africa last month. The Federal Reserve is set to meet next week and could decide to speed up its timeline for removing stimulus from the economy as inflation creeps higher.

Speaking of which, the consumer price index comes out early on Friday, and a higher than expected number could convince the Fed it needs to act more aggressively.

Reuters did a poll of economists, who predicted the Fed would raise rates by 25 basis points to 0.25% to 0.50% in next year’s third quarter, though most also said the risk was that a hike comes even sooner.

Here are three things that could affect markets tomorrow:

1. Consumer prices

U.S. consumer prices are expected to have jumped by 6.8% year-on-year in November, topping October’s 6.2% rise which was the biggest inflation surge in more than 30 years, according to analysts tracked by . The data are released at 8:30 AM ET (1230 GMT).

2. Core consumer prices

Stripping out volatile food and energy prices, so-called core CPI is seen up 4.9% year-on-year. It had risen by 4.6% in October. But it is seen as slowing from October, expected to rise 0.5% for the month compared with 0.6% for the previous month.

3. Consumer sentiment

The preliminary reading of the U.S. consumer sentiment for December, as reflected in the University of Michigan's Consumer Sentiment Index, is seen weakening to 67.1 from November’s 67.4. This number comes out at 10:00 AM ET.

 

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