[Platinum Insights] (1.12.23) CPI, S&P500, Market movement

Stock futures for the three major indices fluctuated between small gains and losses on Thursday as investors digested the recent US CPI report. 

A Bureau of Labor Statistics report showed that the annual headline and core inflation rate slowed to 6.5% and 5.7%, respectively, in December, mostly in line with market expectations. While this data showed easing price pressure, inflation continues to run well above the Federal Reserve’s 2% target. 

Meanwhile, initial unemployment claims unexpectedly fell to a three-month low last week, pointing to a tight labor market. Earlier this week, a chorus of hawkish comments from Fed policymakers warning that rates will have to go even higher brought uncertainty around the magnitude of the Fed’s next hike.  

The Consumer Price Index in the United States decreased 0.1% month-over-month in December of 2022, the first decline since May of 2020 and beating market forecasts of a flat reading. Gasoline costs dropped 9.4%, more than offsetting a 0.8% increase in shelter prices. Food prices were up 0.3%, below 0.5% in the previous month. 

Other increases were also seen for household furnishings and operations (0.3%), motor vehicle insurance (0.6%), recreation (0.2%), and apparel (0.5%). In contrast, the indexes for used cars and trucks (-2.5%), and airline fares (-3.1%) were among those that decreased over the month.  Price action for the S&P 500 is coming up on some important resistance levels including gap fill, the 200-day SMA and the long-term bearish trend line.

 If it can close above these levels and maintain the strength, it’s a game changer for this index.  Have a great day!  This information is for educational purposes and not a recommendation to buy or sell a security.

The 200-day SMA on the S&P 500 – SPX has shown resistance this morning. It’s tough for price action to break through and maintain above moving averages. That is why they are important especially in decisions of where to potentially place buy & sell limits.

The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November, the U.S. Bureau of Labor Statistics reported today. 

Over the last 12 months, the all items index increased 6.5 percent before seasonal adjustment.  The index for gasoline was by far the largest contributor to the monthly all items decrease, more than offsetting increases in shelter indexes. 

The food index increased 0.3 percent over the month with the food at home index rising 0.2 percent. The energy index decreased 4.5 percent over the month as the gasoline index declined; other major energy component indexes increased over the month.  

The index for all items less food and energy rose 0.3 percent in December, after rising 0.2 percent in November. Indexes which increased in December include the shelter, household furnishings and operations, motor vehicle insurance, recreation, and apparel indexes. 

The indexes for used cars and trucks, and airline fares were among those that decreased over the month.  

The all items index increased 6.5 percent for the 12 months ending December; this was the smallest 12-month increase since the period ending October 2021. The all items less food and energy index rose 5.7 percent over the last 12 months. The energy index increased 7.3 percent for the 12 months ending December, and the food index increased 10.4 percent over the last year; all of these increases were smaller than for the 12-month period ending November.