LIVE MARKETS-After CPI, are stocks a buy?

ReutersJan 15, 2025 4:50 PM

Main U.S. indexes advance; Nasdaq out front, up ~1.8%

Comm Svcs leads S&P sector gainers; Staples weakest group

Euro STOXX 600 index up ~1.4%

Dollar ~flat; gold edges up; crude up ~2%; bitcoin up >2.5%

U.S. 10-Year Treasury yield slides to ~4.67%

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AFTER CPI, ARE STOCKS A BUY?

Stock markets bounced on Wednesday after consumer price inflation data for December eased fears that inflation may be re-accelerating, which would likely take the prospect of any further Federal Reserve rate cuts this year off the table.

That could also make it an attractive time to buy the dip, said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

“We believe the market will be encouraged by the decrease in core inflation, which should alleviate some of the pressure on stock and bond markets, both of which have had a poor start to the year on inflation fears and concerns the Fed would not only stop cutting interest rates, but could even reverse course and begin raising them,” Zaccarelli said in a note.

“As long as the economy continues to grow, the labor market remains stable and companies are able to keep growing profits, we would be buying any dips. We understand the pushback that valuations are high – and we share those concerns – but history shows that bull markets don’t end because of higher valuations, they end because the economic cycle is cut short by too much leverage or exogenous shocks and that is why valuation in and of itself is a poor indicator for market timing,” he added.

(Karen Brettell)

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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

BOFA RAISES TREASURY YIELDS FORECAST, STILL SEES 10-YEAR UNDER 5% - CLICK HERE

PRICE POINTS: CPI, MORTGAGES AND EMPIRE STATE - CLICK HERE

U.S. STOCKS WRAPPED IN GREEN TAPE - CLICK HERE

U.S. STOCK FUTURES SURGE, YIELDS SLIDE, AFTER BROADLY IN-LINE CPI - CLICK HERE

BANK OF JAPAN HIKE IN PLAY NEXT WEEK - CLICK HERE

HEALTHCARE STANDS OUT AS US EARNINGS POTENTIAL TO BROADEN - SAXO - CLICK HERE

UK CPI: JUST WHAT THE DOCTOR ORDERED - CLICK HERE

UK STOCKS OUTSHINE IN EUROPE AS INFLATION SLOWS - CLICK HERE

EUROPE BEFORE THE BELL: FTSE FUTURES OUTPERFORM ON SOFT INFLATION DATA - CLICK HERE