* U.S. stocks ended a five-week streak.
The U.S. core PPI in January posted the biggest month-on-month increase in a year.
Nike plans to cut 2% of its workforce
Digesting the latest inflation data, U.S. stocks rose and fell on Friday. As of **, the Dow is **14513 points, down 037% at 3862799 points; The S&P 500 slipped 2416 points or 048% at 500557 points; The Nasdaq closed at 1577565 points, **13052 points, down 082%。
Summing up the week, investors weighed the economic outlook, the trend of U.S. stocks, and the three major stock indexes all ended their weekly five-day streak. The Dow fell 01%, the S&P 500 has a cumulative decline of 04%, and the Nasdaq fell 13%。
Greg Bassuk, chief executive of investment firm AXS Investments, said investors should be prepared for short-term volatility ahead. Until recently, most investors believed that interest rate cuts would begin in the first half of the year, and that the Fed was more likely to delay easing into the second half of the year, he said. He added that the seesaw effect of the market reflects the tug-of-war between optimism about corporate earnings and other signs of economic strength and sticky inflation.
The monthly rate of core PPI hit a one-year high in January.
The U.S. Department of Labor released the latest data before the market, and the producer** index (PPI) in January was **03%, higher than the market expectation of 01%, and recorded the largest month-on-month increase since August 2023, and the previous value was down 01%；The core PPI after excluding food, energy, and services was 06%, far exceeding the expected value of 01%, the monthly rate hit a new high since January last year, and the previous value was 02%；On a year-on-year basis, the January PPI was 09%, and the core PPI was flat at 26%。
In terms of sub-items, services*** are the main drivers of inflation**, with a month-on-month increase of 06%, while goods ** were 02%。
Recently, a series of data points to a rise in inflation, which has further complicated the Fed's work. Ian Lyngen, head of U.S. interest rate strategy at the Bank of Montreal, commented in a report sent to CBN reporters: "Inflation may be stickier than previously expected, and this concern has intensified." ”
Lingen explained that a closer look at the core inflation data and the core services inflation, which excludes housing, rose 0.m. month-on-month in January7%, the biggest monthly increase since September 2022, and given the correlation between this super-core inflation measure and nominal wages, the risk of a wage-spiral is back in the spotlight. "At the start of 2024, inflation is strong across the board, enough to push back the first rate cut again. He believes that a rate cut in March or May is less likely, with June being the most reasonable assumption at the moment.
Treasury yields moved higher after the PPI data, with the 10-year Treasury yield rising above 43%。
The Fed** is patient in policy support.
San Francisco Fed President Mary Daly said on Friday that the Fed has more work to do to ensure price stability. She stressed that there are two risks to be aware of when setting policies: slow progress in the decline in inflation and a sharp deterioration in the job market. She believes that three rate cuts this year are reasonable basic assumptions. "When patience is required, we have to resist the fast-moving ** and be prepared to react quickly as the economy develops. ”
Former U.S. Treasury Secretary Lawrence Summers said on the same day that the latest data shows that the continued inflationary pressure shows that the Fed's next move may be to raise interest rates, rather than cut interest rates, with a probability of 15%, and the Fed must be very careful that cutting interest rates in March will be the wrong decision.
On the other hand, the wave of layoffs since the beginning of the year has not stopped, sports brand giant Nike announced that in order to cut costs and streamline the structure, it intends to lay off 2% of its workforce, involving about 1,600 employees, and as of the end of May last year, the company had more than 8 employees30 thousand. According to an internal notice obtained by **, this round of layoffs is expected to begin on Friday. The stock closed down 24%。
On the commodity front, oil prices on Friday** offset a gloomy demand outlook as tensions rise in the Middle East. WTI*** rose 1 on Friday$16, up 15% to close at 79$19 per barrel, the highest level since November last year, on a weekly basis, U.S. oil has accumulated about 3%; Brent closed at 83 cents on Friday at 61 cents$47 barrel.