CPI Justifies the Market’s Exuberance, This Time

The Australian Financial Review2022-12-14

The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment after an unequivocally positive consumer price index report on Tuesday (Wednesday AEDT).The numbers ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

Singman
2022-12-14
Singman
Like
- Ichua:
  Good
Hupfumi
2022-12-14
Hupfumi
Food prices not coming down

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2291294037?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2022-12-14 15:01","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2291294037","market":null,"top_or_hot":-1,"title":"CPI Justifies the Market’s Exuberance, This Time","media":"The Australian Financial Review","content":"<div>\n<p>The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment after an unequivocally positive consumer price index report on Tuesday (Wednesday AEDT).The numbers ...</p>\n\n<a href=\"https://www.afr.com/policy/economy/cpi-justifies-the-market-s-exuberance-this-time-20221214-p5c67f\">Source Link</a>\n\n</div>\n","source":"afr_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>CPI Justifies the Market’s Exuberance, This Time</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCPI Justifies the Market’s Exuberance, This Time\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-12-14 15:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.afr.com/policy/economy/cpi-justifies-the-market-s-exuberance-this-time-20221214-p5c67f><strong>The Australian Financial Review</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment after an unequivocally positive consumer price index report on Tuesday (Wednesday AEDT).The numbers ...</p>\n\n<a href=\"https://www.afr.com/policy/economy/cpi-justifies-the-market-s-exuberance-this-time-20221214-p5c67f\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"XJO.AU","symbol_name":"标普/澳交所 200指数","start_time":0,"source_url":"https://www.afr.com/policy/economy/cpi-justifies-the-market-s-exuberance-this-time-20221214-p5c67f","article_id":"2291294037","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2291294037","pubTimestamp":1671001265,"columns":[],"sourceInfo":{"source_id":"afr_stock","name":"The Australian Financial Review"},"weMediaInfo":null,"summary":"The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment a","collect":0,"end_time":0,"defaultTopTitle":"afr.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"XJO.AU":"标普/澳交所 200指数","XKO.AU":"标普/澳交所 300指数","XAO.AU":"标普/澳交所 普通股指数"},"translate_title":"这一次，CPI证明了市场的繁荣","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"XAO.AU":0.9,"XJO.AU":0.9,"XKO.AU":0.9},"content_text":"The battle against inflation is far from over, but markets can’t be blamed for rushing to judgment after an unequivocally positive consumer price index report on Tuesday (Wednesday AEDT).The numbers showed that core prices – excluding volatile food and energy – rose just 0.2 per cent in November from the previous month. Stripping out the contentious shelter component of the index, core prices fell 0.1 per cent on the month.Using a three-month annualised rate to smooth out the month-to-month volatility, the core index, excluding shelter, suggests an underlying rate of core inflation of just 1 per cent – below the Federal Reserve’s target.Consider the policy backdrop. The CPI carries a special measure of weight this month because it comes on the eve of the next Fed monetary policy decision.The Fed’s rate-setting committee is still likely to raise interest rates by 50 basis points on Wednesday, but there can be little doubt that the numbers will embolden doves who think that the balance of risks is tipping towards recession over inflation.There should be some meaningful debate among committee members about making the next rate increase the Fed’s last, and markets will be waiting with bated breath for signs of how receptive chairman Jerome Powell is to that argument.Soft landing hopesSo, what does that mean for the medium term? For starters, it means price-earnings multiples can continue to drift higher.Higher risk-free rates have been the dominant driver in the compression of forward P/E ratios since January, with multiples plummeting from about 21.6 times in January to a low of 15.2 times in September. At the current 17.8 times, they could track bond prices higher if inflation keeps moving in this direction.Equally significant, the development bolsters the argument for a soft landing in the economy.A sizable chorus of economists thinks a recession may already be baked in for 2023 thanks to the famous “long and variable lags” of monetary policy; the damage has already been done, many might say.But a quick resolution to the inflation problem at least increases the odds of avoiding that outcome and opens the door to an upside surprise.S&P 500 strategists are already bracing for meagre 3 per cent earnings-per-share growth in 2023. A very modest uptick in EPS expectations (say, 5 per cent growth instead of 3 per cent), combined with a reasonable 19 times multiple, gets you back to about 4400 on the index, another 8 per cent upside from current levels.As always, there’s risk in over extrapolating from what now stand as just two consecutive encouraging CPI reports.Fed policymakers have been burnt by volatile inflation data already, and they’ve been conditioned to be more cautious.“Nobody likes to get headfaked, and the way for Powell and his colleagues to get headfaked is to overreact to a couple of encouraging releases,” said David Wilcox, director of US economic research at Bloomberg Economics.Powell’s four pillarsAt his Brookings Institution speech last month, Powell laid out four pillars for thinking about the inflation outlook, implying that he won’t consider lower interest rates until he finds ample comfort in each of them. Here’s where the Powell framework stands after Tuesday’s report:Growth running far enough below long-run trend to reduce inflation (check).Clear signs of housing and rent disinflation, at least in forward-looking indicators of market rents (check).Cooling core goods inflation and healing supply chains (emphatic check: core goods prices actually fell outright for the second consecutive month).Cooling core services less shelter, and a more sustainable pace of wage growth (still not there: core services, excluding shelter, rose just 0.2 per cent in the most recent report, but data for the past three months suggest an annualised rate of about 6 per cent).More to that final point, trend wage growth still looks to be about 5 per cent, a thorn in Powell’s side that he fears will make services inflation harder to tame in the medium term.Clearly, the wage debate has its detractors, who note that the current bout of inflation didn’t start with the labour market and think that the relationship between tight labour markets and inflation is antiquated.That could be, but the Fed is going to hold on to that line of thinking until the hard inflation data prove it unequivocally wrong.Yet, while the Fed waits on clear and compelling evidence that inflation is back in its cage, market participants have no such luxury. And, for once, you can’t really blame them.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9921159140,"gmtCreate":1671007232180,"gmtModify":1676538474691,"author":{"id":"3575125836760247","authorId":"3575125836760247","name":"Singman","avatar":"https://static.tigerbbs.com/d770feb757705f2d631d2d5f381ae07b","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"3575125836760247","idStr":"3575125836760247"},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/9921159140","repostId":2291294037,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":105201976,"gmtCreate":1671017447305,"gmtModify":1671017459854,"authorId":3554848762875033,"author":{"id":3554848762875033,"idStr":"3554848762875033","authorId":3554848762875033,"name":"Ichua","avatar":"https://static.tigerbbs.com/175ebc8e659de3f491645e9236066d54","vip":1,"crmLevel":7,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9921159140,"type":1,"supId":0,"prevId":0,"content":"<span class=\"s1\">Good</span>","text":"<span class=\"s1\">Good</span>","html":"<span class=\"s1\">Good</span>"}],"langContent":"EN"},{"id":9921123261,"gmtCreate":1671002059053,"gmtModify":1676538474225,"author":{"id":"4122043789636432","authorId":"4122043789636432","name":"Hupfumi","avatar":"https://community-static.tradeup.com/news/e4b890c31f44dc11a04e4672e44cff28","vip":1,"crmLevel":2,"crmLevelSwitch":0,"authorIdStr":"4122043789636432","idStr":"4122043789636432"},"htmlText":"Food prices not coming down&nbsp;","listText":"Food prices not coming down&nbsp;","text":"Food prices not coming down","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9921123261","repostId":2291294037,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":48,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2291294037"}