Lower costs and mixed signals on inflation
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Lower energy costs in December, especially oil prices, will help reduce inflation in the upcoming CPI report. This may positively impact markets.
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Food prices increased in November and are likely to remain high. This could negatively affect packaged food companies like General Mills, Conagra, and Hormel.
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Used vehicle prices fell sharply in December which could negatively impact used car companies like CarMax and Carvana. However, demand may rebound after tax refunds.
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Tobacco costs rose significantly (7.7%) in November. This could benefit tobacco companies like Altria, Philip Morris, and British American Tobacco.
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Markets expect the Fed to cut rates due to low inflation. However, the Fed may take a more neutral stance initially and renew the Bank Term Funding Program first.