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

Published 12/10/2021, 03:54 PM
Updated 12/10/2021, 04:23 PM
© 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.

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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.

Latest comments

what would be future of btc in 2022
what about shrinkflation
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.
FED money gun in action. bull gambles buy everything without thinking
My money is on the sideline ready to by put option when it is on it's way down.
Yeah, buy those puts once it is all the way at bottom. GL.
one day is run from tech the next day is rush back in.
I guess 10 billion dollar buybacks will do that kind of thing....
And this is supposed to be good news? These "markets" are scaring the life out of most investors
U B making my dreams come true.
Record high in Sp500 . If Trump was president there would be clapping in this forum instead of moaning
U have never lied. Great observation. They were not posting their lies 15 months ago when the stocks were also at record highs.
well lessko, I know from your posts you prefer the corruption of authoritarian governments and their strongman leaders when it comes to simple minded economic policies; a good example is the turkish government, who fires any government official that disagrees with any major economic policy supported by the would be strongman.Trump tried to do the same thing to the present fed chairman, when he threaned to fire him if he didn't go to negatve interest rates. thankfully much smarter people talked him out of it. the corruption of the right is cancerous and distructive to the economy and the middle class. the condition of America's middle class is a direct result of supply side economic policies that were supported by then conservative Republicans and corporatist Democrats. those policies were put in place starting with the Reagan Administration, and have helped create the financial inequalities Americans are now experiencing.
There is a bubble. Enjoy the ride while it last
yes I am thank you and a BIG THANKS Mr. President.
Why would the market not like inflation? Inflation is how corrupt government/politicians siphon money from the lower/middle class into the pockets of large corporations and the top 1%. There is a reason why corporations promote leftist agenda, they use the useful i**ots on the left to get power, while being their oppressor. Leftist it around complaining on twitter about capitalism, while sipping their $10 cup of coffee from starbucks and playing on their $1,200 iphone whole voting in elderly rich white male career-politicians who have been in office creating the system they claim oppresses them. Elon Musk became the richest man on the planet before Tesla even turned a dime in profits thanks to Wall Street/Fed corruption and globalist "green" agenda. There is a reason why both Occupy Wall Street and BLM arose during the Obama years, and the sadists on the left keep voting for more while demonizing those who try to actually try to get rid of government corruption and tyranny.
the s&p500 is signaling that it wants to test the highs next week. if the s&p500 breaks those highs with a couple of daily closes, then it's possible that we will see a rally into the end of the year.
The S&P has increased in value by 50% in 18 months. Are you honestly trying to suggest companies have grown their size/profits in 18 months despite all of the lock downs and labour shortages?? No, it is the FED printing press that has distorted the market completely (including interest rates, bond rates and inflation). Based on natural pre covid growth the S&P should be about 3,000 - 3,500 ....which implies it is about 30%-35% overvalued.
peter....I'm a technician, the markets will tell me with price and volume chart formations and cycles analysis with a 60%- 70% certainly what condition the markets are in and what the market direction might be. your using a form of analysis that maybe right over the long term, but using it to trade the markets is the quickest way to loose a lot of money.
You know what's even more awesome? The BLS is adjusting the formula category weights for the CPI starting January 1. Goodbye, inflation.....on paper. Lies, d***ed lies, and statistics. If you ever wondered whether the US was less corruptible than a country like Zimbabwe, this should put that idea to rest. A long slow slide into the abyss, like the Romans. Gotta love how all great civilizations follow the same overall paths...just little nuances are different.
The S&P high is 4740. If we didnt surpass that then how is that a record?
closing high not intraday
Closing price for the standard & poor indice, not the high price so it is 4712 *****my firm brokerage i see 4718 *****
Remember. First think to die by the hand of the FED is QE. Just keep buying and get all the exposure to risk for that extra half a percentage
It’s all become meme
Really? Wink wink
This rise in the SP500 is window dressing and take away the corporate buyback programs and we wouldn't be here. If I look at the Russell 2000 or the European markets, it's already out of line. I don't trust this market  I have already sold everything and until I see a real correction of 15% to 20%, I will not buy anything.
Money made in the market is money made. You are admitting you missed without explicitly ssying do. Been there. But i learned
It's all good and dandy making small profits here and there or even holding a bigger profit until you see the double digit gap down moves in between market closing and opening times. Technicals and fundamentals support volatile moves down. I mean, march 2020 was only a 30% dip. Where was the crash exactly?
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