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Traders work on the floor of the New York Stock Exchange on January 15, 2025 in New York City.
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This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.
What you need to know today
Core CPI below estimates
US consumer price index rose in seasonally adjusted terms 0.4% in the month in December, putting the 12-month inflation rate at 2.9%, according to the U.S. Bureau of Labor Statistics. reported Wednesday. Core inflation, which excludes food and energy prices, rose 0.2% monthly and 3.2% for the year. The annual reading was down 0.1 percentage point from 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 release of hostages to finish a 15 month war in the Gaza Strip. The Israeli security cabinet must still vote on the deal before its implementation. If approved, the first phase of the deal will include a full ceasefire and the withdrawal of Israeli forces from populated areas of the Gaza enclave, US President Joe Biden said.
Markets enjoy best day in months
US stocks appeared on wednesday for its best day since November, thanks to a colder-than-expected inflation reading and Treasury yields decline. The pan-European Stoxx 600 Index added 1.33%, breaking a three-day losing streak and recording its best performance since August. UK Government Bond Yields fell sharply after official data showed UK inflation fell to 2.5% in December.
JPMorgan Chase beats earnings estimates
JPMorgan Chase published a massive earnings beat in its fourth quarter. The bank’s profits rose 50% to $14 billion during that period and revenue rose 10% to $43.74 billion. This is due to net interest income of $23.47 billion, which exceeded StreetAccount’s estimate by almost $400 million. JPMorgan executives said the bank will be boost share buybacks even as CEO Jamie Dimon in May called the stock expensive.
Goldman Sachs almost doubles its profits
Goldman Sachs fourth quarter earnings beat estimates thanks to higher-than-expected business revenue. The bank said profits roughly doubled from a year earlier to $4.11 billion and revenue rose 23% to $13.87 billion. “There has been a significant change in CEO confidenceparticularly following the US election results,” CEO David Solomon said in a conference call Wednesday.
(PRO) Cautions regarding earnings next week
Approximately 7% of companies in the S&P 500 The index is set to report earnings next week. CNBC Pro looked at the companies that will report earnings next week, looking for those that analysts are increasingly bearish about, and found six companies that had earnings estimates revised downward during the last three months.
The final result
Finally, a slew of good news for bulls, after a dismal start to the year during which markets posted weekly losses on persistent inflation concerns.
Top of page: US inflation in December was lower than expected. To be sure, headline inflation for the month was 0.1 percentage points higher than the Dow Jones consensus estimate.
But the US Federal Reserve pays more attention to core inflation because it excludes volatile swings in energy and food prices, which more accurately reflects price changes in the economy. And core inflation, in monthly and annual terms, was colder than expected.
In fact, as CNBC’s Jeff Cox said noted“Much of the CPI increase was due to a 2.6% increase in energy prices during the month, driven by a 4.4% increase in gasoline. This was responsible for around 40% of the increase of the index, according to the BLS.”
“Today’s CPI figure takes additional rate hikes, which some market participants were beginning to prematurely price in, off the table,” said John Kerschner, head of U.S. securitized products and portfolio manager at Janus Henderson Investors. .
He 10-Year US Treasury Yield fell sharply and is now at 4.655%, compared to last Friday’s close of 4.774%, as traders tempered their interest rate expectations.
That gave the stock room to breathe. He S&P 500 jumped 1.83%, the Dow Jones Industrial Average rose 1.65% and the Nasdaq Composite rose 2.45%. It was the best day for the three major averages since November 6.
Upbeat earnings reports from banks also added to the cheer. Their financial results often serve as a forecast of the overall direction of the economy: Banks’ revenues grow as businesses and consumers engage in more financial activity, which, in turn, helps grow the economy.
For investors, the stars aligned on Wednesday. But just as the skies are constantly changing, volatility, in the form of a new administration and incoming American policies, persists.
— CNBC’s Jeff Cox, Hakyung Kim and Lisa Kailai Han contributed to this report.
