The S&P 500 rises 0.7%, while the Nasdaq climbs strongly by 1.4%. The Dow is trending “flat” and loses -0.4% while the Russell 2000 index of mid-cap stocks rises about 17 points, or 0.7%, after the inflation report.
The rise in the New York market is led by the sector: Communication Services. Which includes companies dedicated to communication, entertainment, media services and technology that facilitate connectivity between people, companies and governments. Like Google and Meta.
It is followed by cyclical consumption and technology, where Nvida rises evenly and recovers from the losses of recent days. Amazon (+2.5%), Tesla (+2.7%) and Google also rose sharply, adding more than 3%, as did Meta.
The inflation data
Lara CastletonDirector of Portfolio Strategy at Janus Henderson explains that it was a figure in line with market expectations and brings relief to a market that did not want any surprise to interrupt this year-end rally.
The general CPI rose 0.3% in the month, which represents an annual increase of 2.7% year-on-year, and the core CPI also increased 0.3% in the month, which represents a year-on-year figure of 3, 3%. Transportation and housing were the main contributors, but housing costs showed a slight decrease from last month, which is an encouraging sign.
Although today’s data was the last hurdle the Fed had to overcome to cut rates next week, the market is now pricing in a 98% probability of this happening and conflictive dynamics are clearly shaping up for 2025.
The labor market continues to weaken, as the latest data shows, but recent spikes in inflation will make it difficult for the Fed to ensure an easy continuation of rate cuts in 2025. The resurgence of inflation is one of the main concerns for clients next year, particularly around the uncertainty of policy proposals in the next administration, and although this data should not force that reality to interrupt the holiday season, investors should be concerned about the impacts that higher inflation could have on their portfolios and be prepared accordingly.
Macy’s results: a disaster
Macy’sannounced that it plans to close 65 of its stores by 2024 as part of a broader strategy to focus on the highest-performing locations, with the goal of closing a total of 150 stores by 2027. This decision comes amid a difficult outlook for the company, which today faces a drop of up to 11% in the value of their actions after reporting lower profits and income. Additionally, Macy’s cut its earnings outlook for the fiscal year.
A $151 million accounting error, discovered between 2021 and 2024 and caused by a fired employee, delayed the publication of third quarter financial results. Despite this setback, some of its brands, such as Bloomingdale’s and Bluemercury, showed signs of growth, although November net sales fell 2.4%.
The situation has generated additional pressure from activist investors, who are urging Macy’s to optimize its real estate value. Meanwhile, Wall Street has begun taking new short positions, which reflects growing skepticism about the company’s ability to regain stability in the short term.
Source: Ambito
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