By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- The first full trading week of 2024 will be highlighted by two reports: the Consumer Price Index (CPI) on Thursday and Producer Price Index (PPI) on Overall, CPI is expected up 0.2%, and core (excluding food and energy prices) is expected up 0.3%. That would result in year-over-year changes of 3.2% and 3.8%, respectively. If achieved, it would be the first core CPI reading below 4% since May 2021.
- Fourth-quarter earnings season kicks off this week. On Friday, several major financial institutions, including JPMorgan Chase, Bank of America, Wells Fargo and Blackrock, will release earnings, along with UnitedHealth Group and Delta Airlines. The consensus forecast is for earnings to grow approximately 11% this calendar year on 5% revenue growth.
- There are four S. Federal Reserve (Fed) speakers scheduled this week, and we expect several comments on monetary policy. There is a disconnect between the Fed’s dot plot (indicating three interest rate cuts in 2024) and the futures markets (indicating as many as six). That is a potential “pain” point for the markets.
Three Things to Know
- The United Nations Food and Agriculture Organization reported a significant decrease in global food prices last year, with the food price index dropping about 10% from 2022 levels. This decline, marked by a 1.5% drop in December from November, helped alleviate worries over global food inflation. The reduction was driven by factors such as increased production and changes in usage in key commodities like sugar, cereals and vegetable oils. (Source: Bespoke)
- In Japan, there is a pop-up restaurant called “The Restaurant of Mistaken Orders.” It was designed to raise public awareness of dementia in a country where 1 in 5 older people will have the condition by 2025. All employees have dementia, so you never know what kind of food or service you’re going to get. (Source: @fasc1nate)
- Shipping costs from Asia to Europe are surging as vessels are forced to avoid the Red Sea. The WCI Shanghai to Rotterdam Index price per 40-foot box has increased from $1,171/box on November 30 to $3,577/box last week. (Source: The Daily Shot, Bloomberg)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.