November Core CPI Data Meets Expectation

Several news items this morning are worth paying attention to today, along with a Fed report this afternoon. At that time, 2pm ET, the Federal Budget will come out. Last time around, we saw the headline at -$205 billion. We also expect a new announcement that will keep interest rates steady at 1.75%, followed by a press conference for Fed Chair Jerome Powell at 2:30pm today.

Ahead of today’s open, November Consumer Price Index (CPI) numbers have been released: +0.3% is the new headline number, up 10 basis points from the +0.2% expected but down from October’s +0.4%. Stripping out food and energy costs — aka the “core” number — we see an in-line +0.2% with expectations and previously reported.

Year over year, headline CPI tallies 2.1%, slightly above expectations but 30 basis points ahead of October’s 1.8%. Core CPI, year over year, was an as-expected 2.3%. This is more of the steady — if tepid — growth we have gotten used to over the past several years. An inflation rate of 2.1% will send no one running for the hills; we can even go back to looking at these figures as somewhat “Goldilocks” — not too hot, not too cold.

The other side of the coin, Producer Price Index (PPI), hits the tape at this time tomorrow. As with November CPI, +0.2% is currently expected, following a +0.4% print for October.

Saudi Aramco (SE:2222)marks its first day of public trading on the Riyadh (Saudi Arabia) stock exchange, at which time the stock grew 10% in value. The state-owned company now holds the honor of being the most highly-valued company on the face of the earth: $1.88 trillion in market cap. Capital raised on the company’s IPO surpassed the previous record, Alibaba (NYSE:BABA) , which had raised $25 billion on its IPO.

In unrelated news, but in the same integrated oil industry, Chevron (NYSE:CVX) has announced Tuesday afternoon it will take a writedown on between $10-11 billion for its Q4 earnings report, expected in late January. Shares are down only modestly on the news, as a “disciplined approach to capital allocation” is directing the decision.