Traders work at the New York Stock Exchange on January 15, 2025 in New York.
David Dee Delgado | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open informs investors about everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
Core CPI below estimates
The US consumer price index rose on a seasonally adjusted basis 0.4% per month in December, putting the 12-month inflation rate at 2.9%, the US Bureau of Labor Statistics reported Wednesday. Core inflation, which excludes food and energy prices, rose 0.2% month-on-month and 3.2% year-on-year. The annual reading decreased by 0.1 percentage point compared to November. Both core readings were also 0.1 percentage points below expectations.
Ceasefire agreement between Israel and Hamas
Israel and Hamas on Wednesday reached an agreement on a ceasefire and the release of the hostages finish a 15-month war in the Gaza Strip. Israel’s security cabinet still has to vote on the agreement before it can be implemented. If approved, the first phase of the agreement will include a complete ceasefire and the withdrawal of Israeli forces from the populated areas of the Gaza enclave, US President Joe Biden said.
Markets are enjoying their best day in months
US stocks popped up on wednesday for their best day since November, on the back of lower-than-expected inflation readings and Reduction of treasury yields. Pan-European Stoxx 600 index added 1.33%, ends a three-day losing streak and records the best performance since August. UK government bond yields fell suddenly after the official data showed Inflation in Great Britain fell to 2.5 percent in December.
JPMorgan Chase records previous earnings estimates
JPMorgan Chase was published by a huge earnings in the fourth quarter. The bank’s profits rose 50% to $14 billion in the period, and revenues rose 10% to $43.74 billion. That’s thanks to net interest income of $23.47 billion, which beat StreetAccount’s estimate by nearly $400 million. JPMorgan executives said the bank would be increase in share buybacks even as CEO Jamie Dimon called the stock expensive in May.
Goldman Sachs roughly doubled its profits
Goldman Sacha earnings in the fourth quarter beat estimates on higher-than-expected trading revenues. The bank said profit roughly doubled from a year earlier to $4.11 billion and revenue jumped 23% to $13.87 billion. “It happened a significant shift in CEO confidenceespecially after the US election results,” CEO David Solomon said at a conference call on Wednesday.
[PRO] Earnings should be cautious next week
Approximately 7% of companies in S&P 500 index will release earnings next week. CNBC Pro took a look at the companies reporting earnings next week, looking for those that analysts are increasingly bearish on, and found six companies that earnings estimates revised downward in the past three months.
Conclusion
Finally, some good news for the bulls, after a poor start to the year that saw markets post weekly losses on persistent inflation concerns.
Top of the page: Inflation in the US was lower than expected in December. To be sure, headline inflation for the month was 0.1 percentage point higher than the Dow Jones consensus estimate.
But the U.S. central bank pays more attention to core inflation because it strips out volatile swings in energy and food prices, giving a more accurate reflection of price changes in the economy. And core inflation, on a monthly and annual basis, was lower than expected.
Indeed, like CNBC’s Jeff Cox recorded“Much of the increase in the CPI came from a 2.6% increase in energy prices in the month, which was fueled by a 4.4% increase in gasoline prices. This was responsible for about 40% of the increase in the index, according to the BLS.”
“Today’s CPI number removes additional rate hikes, which some market participants have started to price in prematurely,” said John Kerschner, head of US securitized products and portfolio manager at Janus Henderson Investors.
The US 10-year bond yield it fell sharply to now stand at 4.655%, compared to last year’s close of 4.774%, as traders eased their interest rate expectations.
This gave stocks some breathing space. The S&P 500 jumped 1.83%, the Dow Jones Industrial Average rose 1.65% and Nasdaq Composite jumped 2.45 percent. It was the best day for all three major averages since November 6.
Upbeat bank earnings reports also added to the cheer. Their financial performance often serves as a predictor of the general direction of the economy: bank accounts grow when businesses and consumers undertake more financial activity, which in turn helps the economy grow.
For investors, the stars aligned on Wednesday. But just as the sky keeps moving, instability, in the form of the new American administration and politics, remains.
— CNBC’s Jeff Cox, Hakyung Kim and Lisa Kailai Han contributed to this report.
