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Wall St rallies with inflation, Fed on tap

Published 12/12/2022, 06:54 AM
Updated 12/12/2022, 06:51 PM
© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022.  REUTERS/Brendan McDermid

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022. REUTERS/Brendan McDermid

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stock indexes rallied to kick off the trading week on Monday, lifted in part by gains in Microsoft and Pfizer (NYSE:PFE), as investors girded for inflation data on Tuesday and a policy announcement from the Federal Reserve later in the week.

Microsoft Corp (NASDAQ:MSFT) rose 2.89% following the tech giant's deal to buy a 4% stake in the London Stock Exchange Group (LON:LSEG), helping to boost each of the three major indexes.

After strong gains in October and November, the benchmark S&P 500 stumbled out of the gate in December, and suffered its biggest weekly percentage decline in nearly three months as mixed economic data helped fuel recession concerns.

Consumer inflation data will be closely monitored on Tuesday, and is expected to show prices increased by 7.3% in November on an annual basis, slowing from the 7.7% rise in the previous month, while the "core" reading which excludes food and energy is expected to show a 6.1% increase from the 6.3% in the prior month.

"The market is pricing in a 6-handle on the CPI tomorrow versus the 7.3% that is expected, and if it has a 6-handle on it, then that would be reason enough to get all excited, at least short-term," said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.

"The other thing is they are once again expecting Jay Powell to come out and have a dovish tone, which would be a huge mistake. Jay Powell needs to stop giving anyone the inclination they are softening up or they are being dovish."

The Dow Jones Industrial Average rose 528.58 points, or 1.58%, to 34,005.04, the S&P 500 gained 56.18 points, or 1.43%, to 3,990.56 and the Nasdaq Composite added 139.12 points, or 1.26%, to 11,143.74.

The rally marked the biggest one-day percentage gain for each of the three major indexes since Nov. 30, and each of the 11 major S&P sectors ended the session in positive territory.

Pfizer shares gained 0.85% after the drugmaker gave revenue forecasts from vaccines across its portfolio.

A cooler than expected inflation report would help support the belief the aggressive policy actions taken by the Fed this year to slow the economy are taking hold. The central bank is widely expected to hike by 50 basis points on Wednesday, which would mark a step down from the hikes of 75 basis points in the last four meetings.

Equities were weaker on Friday after a reading of producer prices for November was more than expected, even though it did show the trend was moderating.

Fears the Fed will make a policy mistake and tilt the economy into a recession have weighed heavily on Wall Street this year, with the S&P 500 down about 16% and on track for its first yearly drop since 2018 and largest percentage drop since 2008.

Rivian Automotive Inc slumped 6.16% after the company paused its partnership discussions with Mercedes-Benz Vans on electric van production in Europe.

Biotech firm Horizon Therapeutics (NASDAQ:HZNP) Plc surged 15.49% following a buyout offer from Amgen Inc (NASDAQ:AMGN), while Coupa Software (NASDAQ:COUP) Inc soared 26.67% after agreeing to sell itself to private equity firm Thoma Bravo LLC.

Weber Inc climbed 23.23% after the outdoor cooking firm agreed to be taken private by controlling shareholder BDT Capital Partners LLC.

Volume on U.S. exchanges was 10.35 billion shares, compared with the 10.49 billion average for the full session over the last 20 trading days.

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 7, 2022.  REUTERS/Brendan McDermid

Advancing issues outnumbered declining ones on the NYSE by a 1.67-to-1 ratio; on Nasdaq, a 1.43-to-1 ratio favored advancers.

The S&P 500 posted 2 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 73 new highs and 264 new lows.

Latest comments

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odds of mkt going today is 99%. it looks cpi-led pivot rally.
Wool
can you help me for how to trading?
how to trading?
Mkt may go up tomorrow. 70% chance.
Amazing the rubbish they use to justify
anyone observing the markets know exactly why the markets are on rally today.. they are just creating room for the big incoming drop .. nothing explains a pump .. i would have liked it sideways or down before CPI. not atall good imo
This economy is so far off from what wall street projects. The facts.1. Interest will continue to rise and will affect the economy in the coming 6 months. 2. C.C debt at all time high. 3. Consumer savings dropping drastically. Real Estate market just at the beginning of a correction. Banks toghtening lending. Small buisiness borrowing increasing. Consumers- Buy now pay later. Many companies still way overvalued. Negative cash flow companies will be in bankruptcy next year. Tell me in 6 months how great everything went as planned.
completely agree
Can't be true.  "This economy is" -- present ... "what wall street projects." -- future
Masive manipulatuon 100-0
The wild intraday swings magically vanish, as another manufactured "rally" unfolds as "investor wait for the FED."  Biggest investment JOKE in the world.
Today's trading range is about the same as yesterday's range.
Massive stock market crash tomorrow? 50-50
Massive rally tomorrow? 50-50
wall street rises as wall street rises.
Stocks being pumped to offset any mid week losses. Why would they rise? Same old rigged gag!
Bah humbug
According to Reuter ,Since last week fed n inflation fear was rising n rising that's why market was deepening ....And now what happened to investors that suddenly the focus changed to fed n cpi data ???I think Reuter is a big joke 🤣🤣
Then tell us what you better theory is
Still thinking?
maybe some people already know the cpi data leaked? they are already acting on it now?
u never know or maybe bull trap
if core cpi is reported below 6%, mkt goes thru roof. extremely tremendously likely.
The main component of energy prices which has been out of control has been energy.  Gas prices have dropped significantly since June.  You want to reduce inflation further? Quit printing money. That won't wreck the economy the same way as raising interest rates. #AuditTheFed
  The Fed is audited, and it has nothing to do w/ members' trading.
The FED is as filthy as Trump. All INSIDERS!! When the market turned green on the last rate announcement, Powell got mad and came out PO'd saying rates weren't going to slow. The market immediately dumped. Powell was sitting on a mountain of puts!! Trump did the exact same thing in July of '18 and crashed the market with tariff announcements when it turned green after a .25% rate hike.
you have proof of all these claims?
When you manage to repair the damage you will stop insulting companies and start supporting them and the companies that are bad, when they apologize they will do the necessary better real support services and they will be successful again you have done a lot of damage so it will come back to you, write what you have succeeded and better grow. You will also have a much better rating. Free of speech, do nice things, support, solve claims give there real people. Stop insult another countries.
  And a house cat is in the same family as a tiger
"start supporting them and the companies that are bad" --  You want us to support bad companies?
LOL. you know nothing about medicine either!
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