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S&P 500 Hits Record, Shrugs Off Hottest Pace of Inflation Since 1982

Stock Markets Dec 10, 2021 04:23PM ET
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© Reuters

By Yasin Ebrahim

Investing.com – The S&P 500 closed at a record Friday, shrugging off the the fastest pace of inflation in 39 years as investors continued to pile into tech stocks as U.S. Treasury yields fell. 

 The S&P 500 rose 0.95% to close at a record of 4,712.02. The Dow Jones Industrial Average added 0.60%, or 216 points, the Nasdaq climbed 0.73%.

CPI rose 0.8% in November, a tenth of a percentage point more than expected, though the year-on-year consumer prices jumped 6.8%, in-line with expectations and the fastest rate since June 1982.

"People were expecting a very high number and they got it […] that's why there's a muted market reaction to this inflation report," Chief Strategist at Spouting Rock Asset Management Rhys Williams told Investing.com in an interview on Friday.

The multi-decade fast pace of inflation failed to spook the markets as it was largely priced in and comes at a time when investors are expecting the Federal Reserve to speed up the pace of bond tapering and turn more hawkish at its monetary policy meeting next week.

"Powell said two weeks ago that the Fed will discuss increasing the taper and inflation wasn't transitory … that would suggest that the market is expecting increased hawkishness at the Fed meeting, compared to a month or two ago,” Williams added.

Against the backdrop of in-line inflation, Treasury yields fell sharply, pushing growth sectors of the market - sensitive to rates - tech sharply higher.

As well as falling interest rates, better-than-expected quarterly results from Oracle and Broadcom also supported climb in tech.

Broadcom (NASDAQ:AVGO) rise more than 8% after the chipmaker hiked its quarterly dividend and announced a $10 billion share buyback Thursday after reporting fiscal fourth-quarter results that topped expectations, led by a rebound in enterprise cloud and services demand.

“While FY21 experienced a meaningful rebound in Cloud, FY22 is likely to be characterized by sustained momentum in core enterprise and along with still tight supply and ASP [average selling price] tailwinds especially in 1HCY22, should support another double digit year of rev growth,” Credit Suisse said.

Oracle (NYSE:ORCL) reported fiscal fourth quarter results that topped Wall Street estimates, sending its shares more than 15% higher.

Consumer stables, a defensive corner of the market, was also in the ascendency, led by a more than 5% rise in Costco (NASDAQ:COST) following better-than-expected quarterly results.

In other news, Beyond Meat (NASDAQ:BYND) slipped 8% as Taco Bell reportedly is set to abandon plans to trial Beyond Meat’s plant-based version of carne asada, Bloomberg reported.

S&P 500 Hits Record, Shrugs Off Hottest Pace of Inflation Since 1982
 

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Comments (20)
OTAH LAWRENCE
OTAH LAWRENCE Dec 11, 2021 12:59PM ET
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what would be future of btc in 2022
Nelson Torres
Nelson Torres Dec 11, 2021 5:15AM ET
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what about shrinkflation
Edward Gerety
EdwardTjGerety Dec 11, 2021 2:16AM ET
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The working classes is shrinking under Biden's policies as wage growth is half that of inflation. Watch for auto loan default rates to start ticking up. Followed by credit card defaults and then home mortgage defaults to creep up. By the time markets start reporting it you should be pulling out of equities. Life Commodities will be the goldmine in 2022.
perplexed76 .
perplexed76 . Dec 10, 2021 10:12PM ET
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FED money gun in action. bull gambles buy everything without thinking
Etu Truong
Etu Truong Dec 10, 2021 8:06PM ET
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My money is on the sideline ready to by put option when it is on it's way down.
TheLast LoserDon
TheLast LoserDon Dec 10, 2021 8:06PM ET
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Yeah, buy those puts once it is all the way at bottom. GL.
jason xx
jason xx Dec 10, 2021 8:04PM ET
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one day is run from tech the next day is rush back in.
Dave Jones
Dave Jones Dec 10, 2021 7:59PM ET
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I guess 10 billion dollar buybacks will do that kind of thing....
Stan Smith
Stan Smith Dec 10, 2021 7:46PM ET
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And this is supposed to be good news? These "markets" are scaring the life out of most investors
Paul Richard
Paul Richard Dec 10, 2021 7:06PM ET
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U B making my dreams come true.
CFG fdez
CFG fdez Dec 10, 2021 7:01PM ET
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Record high in Sp500 . If Trump was president there would be clapping in this forum instead of moaning
Paul Richard
Paul Richard Dec 10, 2021 7:01PM ET
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U have never lied. Great observation. They were not posting their lies 15 months ago when the stocks were also at record highs.
 
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