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Market Commentary

Waiting for the Fed

By Charles Payne, CEO & Principal Analyst
12/11/2019 12:59 PM

The Consumer Price Index (CPI) report saw higher prices from the usual suspects such as medical care, food and recreation. The index rose 0.3% in November, beating consensus of 0.2%.

The latest report noted that retailers lowered prices to attract more buyers during Black Friday and Cyber Monday.

Percentage change:

This morning, American Eagle Outfitters (AEO) noted on its press release that earnings were impacted by higher discounts due to demand pressures. “Softer demand in certain AE apparel categories led to higher markdowns and has persisted into Q4,” Jay Schottenstein, CEO of American Eagle Outfitters warned.

Overall, core CPI grew 2.3% year over year, in-line with expectations.

Materials and Technology are the leaders today.  Apple (AAPL) is up again and Netflix is gaining back some of yesterday’s losses, up 1.6%  The Dow is the only major index in the red. 

S&P 500 Index

+0.06%

 

Communication Services (XLC)

+0.20%

 

Consumer Discretionary (XLY)

 

-0.08%

Consumer Staples (XLP)

+0.10%

 

Energy (XLE)

 

-0.02%

Financials (XLF)

 

-0.23%

Health Care (XLV)

+0.08%

 

Industrials (XLI)

+0.16%

 

Materials (XLB)

+0.39%

 

Real Estate (XLRE)

 

-0.47%

Technology (XLK)

+0.27%

 

Utilities (XLU)

 

-0.05%

Oil prices declined after the EIA report showed an unexpected climb in U.S. crude inventory. WTI hovered around $59.10 ahead of the report and extended losses after it was released. Oil is testing its support level at $58 and is currently at $58.58. 

Chevron (CVX) is continuing its downward trend, down 0.8% after it announced it will write down $11 billion in gas assets

We are a little over an hour away from the Fed’s rate decision.  We do not expect any changes, but investors will be listening closely to comments from Powell.  Speaking of rates, Jeffrey Gundlach, the so called "Bond King" expects long-term interest rates to move higher and does not believe that a recession is on the horizon for 2020. The benchmark 10-year yield is down slightly to 1.82%.


 

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