Major Averages Jump 2% After Inflation Cooled In November

Barry Adams
13 Dec, 2022
New York City

Stocks soared on Wall Street after November inflation was smaller than expected, lifting hopes of a smaller rate hike tomorrow. 

Consumer prices rose at a slower pace in November after energy prices plunged sharply but cost of housing remained elevated. 

Core rate of inflation also slowed, raising the prospect of a moderate interest rate increase on Wednesday. 

The yield on 2-year Treasury notes declined sharply to a 3-month low of 4.20%, 10-year Treasury notes fell to 3.45% and 30-year U.S. bonds dropped to 3.49%. 

 

Market Indexes Jump 2% 

Tech stocks led the market advance on the hopes that future rate hikes may be moderate after inflation cooled in November. 

The S&P 500 index soared 2.0% to 4,068.52 and the Nasdaq Composite index jumped 2.7% to 11,426.24. 

 

Oil and Natural Gas Rebounds 

Crude oil prices in New York and London rose amid optimism about China's easing of mobility restrictions and unwinding of stringent isolation requirements for coronavirus infected patients.  

Crude oil increased $1.42 to $74.58 a barrel and natural gas futures added 46 cents to $7.04 a thermal unit. 

 

Consumer Inflation Eases In November 

The Consumer Price Index increased 7.1% in November from a year ago and rose 0.1% from October, the U.S. Bureau of Labor Statistics reported Tuesday.

The monthly increase data are adjusted for seasonal factors but annual pace of change is unadjusted for seasonal variations.

The annual pace of increase was the smallest 12-month increase since the period ending in December 2021.

The core inflation, excluding food and energy, slowed to 6.0% on an annual basis and eased to 0.2% on a monthly basis in November.

Despite the cooling of inflation, prices still rose at elevated levels after the decline in energy prices were offset by the increase in housing costs.

The energy index decreased 1.6% over the month as  the gasoline index, the natural gas index, and the electricity index all declined.

The energy index increased 13.1% over the 12-month period.

The shelter increased at a slower pace of 0.6% over the month after rising 0.8% in October and slowed to 7.1% increase on an annual basis.

 

U.S. Stock Movers 

 Oracle Corporation rose 2.7% to $83.43 after the database developer said revenue in the fiscal 2023 second quarter rose 18% to $12.3 billion. 

The company swung to a net income of $1.7 billion from a loss of $1.2 billion or 63 cents from 46 cents loss a share a year ago.

Boeing Company rose 1.2% to $188.52 after United Airlines placed an order to purchase 200 jet planes with an option to acquire more planes in future. 

United Airlines said it plans to purchase 100 787 Boeing Dreamliners and 100 Boeing 737 Max jets as the company replaces its aging fleet.

 The order is worth $43 billion at list prices.

Cryptocurrencies and publicly listed companies were in focus after The Bahamas police arrested the former chief executive of the fallen crypto exchange FTX. 

Sam Bankman Fried faces criminal charges including defrauding investors and wire fraud charges and a separate set of charges from the U.S. Securities and Exchange Commission. 

Coinbase Global declined 1.1% to $42.15 and the Bitcoin and other cryptocurrencies rose between 2% and 4%. 

Robinhood Markets increased 1.1% to $9.69.