For the week ended 12/14/2024.
The narrative over the past 9 - 12 months has been a cooling economy and job creation will result in reduced inflationary pressures. In part due to this, the FOMC initiated an easing campaign a few months back. Well, then the election created a host of market uprisings along with, at least so far, signs of increased economic activity. Today, the term 'animal spirits' is quickly being adopted again, along with amplified talk of tariffs.
My reason for this diatribe is inflation, as measured by the CPI, ticked up in November to 2.7% from the prior month’s 2.6%. This is the highest 12-month rolling rate since last summer and marks the third increase in a row. From a month-over-month perspective, this is the fastest increase in a year and a half.
Okay, enough of that. So how did the markets respond? Well, outside of cash and inflation loving commodities, all the other asset classes had losses on the week. Domestic stocks were down -60 bps while 'safe' domestic bonds fell -1.4%. Global property shares were the biggest losers on the week, falling -1.9%.
Retail sales data comes out Tuesday while Thursday brings the last FOMC rate decision of 2024. Good morning.
Interesting data point of the week.
Source: Visual Capitalist
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