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Stock Futures are flat with all eyes on key inflation report

Stock Futures are flat with all eyes on key inflation report:

There was a change in stock futures overnight trading as investors awaited a key inflation to assess the outlook for the Fed’s rate hiking campaign. 

Futures connected to the Dow Jones industrial average inched up 12 points. S & P 500 futures and Nasdaq were both flat. 

December consumer index reading with the consumers forecast is asking for a slight easing in price pressure. 

Economists are saying that the consumer price index dropped by 0.1% for December, but the rise is 6.5% over the years, compared to a 0.1% monthly gain in November, and an annual speed of 7.1%, says Dow Jones. 

The CPI is doing well at a 9.1% peak in June. Without including food and energy prices, economists expect the CPI for December to be 0.3% higher than the previous month and 5.7% higher than last year. 

“Inflation should continue to decline, heading to federal rate hikes this spring, keeping interest rates in check, and buoying corporate profits,” Jeff Buchbinder said. 

Stocks rallied Wednesday before the inflation report as investors bet the Fed could slow down its rate hikes in light of tame prices. The dow raised more than 260 points, while the S & P 500 gained 1.3%, with all 11 sectors ending the day higher. The tech-heavy Nasdaq Composite increased 1.8% Wednesday, with a four-day streak. 

Disney shares rose 1.5%. 

It is possibly too early to be enjoying and cheering the early signs of inflation easing, as services could keep price pressure high. 

“The main upside risk to core inflation comes from the ex-shelter service components,” Patterson said.

“Persistent wage growth could keep services inflation running hot in 2023. The recent slowing in wages, while welcome, does not yet suggest a broader slowing of the labor market.” 

While goods deflation is a good sign, peak inflation is determined by two more components- a slow labor market and persistently cooling shelter inflation. Patterson discusses this.