December CPI has released, rarely so in-line with estimates.
CPI increased 6.5% year-on-year, continued to decrease from 7.1% in November; 0.1% month-on-month, dropped from 0.2% month-on-month in November.
Core CPI increased 5.7% year-on-year, continued to decrease from 6% in November; month-on-month increase was 0.3%, higher than previous month of 0.2%.
How about by catagories?
1. Food. The food index increased 0.3 percent in December following a 0.5-percent increase in November. The food at home index rose 0.2 percent in December. Three of the six major grocery store food group indexes increased over the month. But the fruits and vegetables index fell 0.6 percent over the month with the fresh fruit index declining 1.9 percent. The food away from home index rose 0.4 percent in December
2. Energy. The energy index fell 4.5 percent in December after falling 1.6 percent in November. gasoline index declined 9.4 percent over the month, following a 2.0-percent decrease in November. The fuel oil index rose 41.5 percent over the last 12 months, due to lagging effect. However, electricity rose 14.3 percent, and the index for natural gas increased 19.3 percent over the same period, largely due to bad weather.
3. Service. The index for all items less food and energy rose 5.7 percent over the past 12 months. The shelter index increased 7.5 percent over the last year, which contributed half of the CPI increase,and also increased by 0.8% month-on-month, which was higher than last month.
Rental market is still prospective, may caused by rising interest rates. It is expected that the year-on-year growth rate will return to normal by spring. Transportation and medical care also returned to positive month on month, while the price of Apparels also stimulated by the shopping season.
It is worth noting that in the automobile, although the year-on-year growth rate of new cars is still 5.9% (below average), Used cars and trucks have further dropped by 8.8% yoy and 2.5% mom. Auto market is in trouble, citizens' motivation to change cars under high inflation is weakened.
No wonder Elon Musk, the richest man, was perssimistic about economy, he also was one of the first predicted recession. $Tesla Motors(TSLA)$ is still the leader, but only he knows the sadness inside.
Well, investors may at a loss.
Market is in divergence and the contest between longs and shorts is obvious.
Bulls may pay more attention to the downward trend of overall CPI and core CPI, and the pressure of higher interest end will be much reduced. Bears may pay more attention to the stickiness of CPI. After all, the year-on-year and month-on-month growth rates of shelters, the largest weight item in core CPI, have slightly exceeded expectations.
When investors' expectations are not consistent, so there are often more games, so the probability of Sell the Fact or buying consistently will be much lower.
Therefore, we should keep an eye on different industries, sector and stocks choice is more important. It is the time for investors to seek alpha.
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