CPI Rises 0.4%; Rate Decision

123jump.com Staff
16 Dec, 2009
New York City

U.S. stocks are expected to follow the rise in European and the Asian markets as the market awaits the Fed statement and rate decision this afternoon. The CPI in November increased 0.4% after rising at 0.3% in October and the inflation in the Euro zone was 0.5%. UK unemployment was stable at 7.9%.

[R]9:00 AM New York – U.S. stocks are expected to follow the rise in European and the Asian markets as the market awaits the Fed statement and rate decision this afternoon. The CPI in November increased 0.4% after rising at 0.3% in October and the inflation in the Euro zone was 0.5%. UK unemployment was stable at 7.9%.[/R]

Stocks are likely to trade subdued as the market awaits the Fed statement on the economy and interest rate later in the afternoon.

The Federal Open Market Committee is scheduled to conclude its 2-day meeting today, the last for the year and leave the rates unchanged. The financial markets are not expecting any change in interest rates and are looking for the Fed to keep its stance towards low interest rate.

The consumer price index increased at 0.4% rate in November after increasing at 0.3% in October. The core rate of inflation, a measure that excludes food and energy prices was unchanged.

Compared to a year ago, the prices increased 1.8% in the month and core index increased 1.7%, according to the Labor Department release today. Food prices which account for 15% of the index increased 0.1%.

The sharp increase in energy costs is since September 2008 has driven the inflation higher. Crude oil prices increased 4.1% in November and gasoline increased 6.4% and fuel oil jumped 9%.

Euro Area Inflation Rises

Euro area annual inflation was 0.5% in November 2009, up from -0.1% in October. A year earlier the rate was 2.1%. Monthly inflation was 0.1% in November 2009. In the wider EU 27 nations annual inflation was 1.0% in November, up from 0.5% in October. A year earlier the rate was 2.8%.

UK unemployment Stable

UK unemployment rate for three months to October was unchanged to 7.9% from the previous quarter. The number of unemployed people increased 21,000 in the quarter to 2.49 million, the highest since three months to March 1995.

Earnings Review

Adobe Systems Incorporated, the design software maker said fourth quarter revenues fell 17.3% to $757.3 million from $915.3 million a year ago. Net loss in the quarter was $32.0 million or 6 cents per diluted share compared to net income of $245.9 million or 46 cents per share a year ago.

Total revenues for the fiscal year 2009 fell 17.6% to $2.95 billion from $3.58 billion a year ago. Net income for the year fell 55.7% to $386.5 million or 73 cents per diluted share compared to net income of $871.8 million or $1.59 per share a year ago.

Joy Global Inc, the maker of mining equipment reported fourth quarter sales fell 6.5% to $963.5 million from $1.03 billion a year ago. Net income in the quarter rose 5% to $124.0 million or $1.20 per diluted share compared to net income of $118.0 million or $1.11 per share a year ago.

Net sales for the fiscal year 2009 rose 5.3% to $3.6 billion from $3.42 billion a year ago. Net income for the year rose 21.5% to $454.7 million or $4.41 per diluted share compared to net income of $374.3 million or $3.45 per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 93.93 or 0.93% to 10,177.41, and Hang Seng index in Hong Kong decreased 202.18 or 0.93% to 21,611.74, and CSI 300 index in China lower 22.62 or 0.63% to 3,560.72. ASX 200 index in Australia decreased 11.60 or 0.25% to 4,661.90. The FTSE Bursa KL Composite index in Malaysia was lower 1.78 or 0.14% to 1,269.03.

The Kospi Index in South Korea decreased 1.61 or 0.10% to close at 1,664.24. SET index in Thailand closed higher 6.37 or 0.90% to 716.01. JSE Index in Indonesia increased 27.81 or 1.11% to 2,522.54. The Sensex index in India increased 35.61 or 0.21% to 16,912.77.

Europe Markets Review

In London FTSE 100 Index traded higher 32.18 or 0.61% to 5,317.95, in Paris CAC 40 Index increased 35.33 or 0.92% to 3,869.42 and in Frankfurt DAX index traded higher 73.18 or 1.26% to 5,884.52. In Zurich trading SMI increased 46.84 or 0.73% to 6,486.24.