Consumers shop for groceries at a retail store chain in Rosemead, California, on December 12, 2023.
Frederick J. Brown | AFP | Getty Images
Price pressures continue
The December inflation report showed consumer prices rising more than expected. The consumer price index rose 0.3% in December, according to Labor Department data, slightly more than expectations for a 0.2% rise. On an annual basis, the CPI rose 3.4% year over year, also higher than the 3.2% rise expected by economists surveyed by Dow Jones. The price increase was mainly driven by higher shelter costs.
Flat stock
US stocks ended Thursday near the flat line, as slightly hotter-than-expected inflation data kept any big moves at bay. The European Stoxx 600 index ended lower for a third straight day, with Marks & Spencer shares falling to the bottom of the index after the British retailer cited “near-term” challenges.
Bitcoin ETFs Go!
A bitcoin exchange-traded fund debuted on U.S. exchanges on Thursday, tracking extreme swings in the cryptocurrency’s volatile prices. There were about 11 exchange-traded funds that began trading after the SEC approved a recent rule change, including the Grayscale Bitcoin Trust and the iShares Bitcoin Trust that saw tens of millions of shares change hands.
Laying off technical workers
Investors on Thursday also saw a series of layoffs at technology companies. In a bet to focus on its “biggest product priorities,” Alphabet, Google’s parent company, has laid off several hundred employees. Discord, a popular messaging service used by gamers, also confirmed it would cut 17% of its workforce of about 170 jobs, while Amazon’s Audible division said it would cut about 5% of its broader workforce.
(PRO) Impact of the New Bitcoin ETF
Analysts are already starting to predict what could happen next after the long-awaited Bitcoin ETFs began trading on US exchanges. Hopes are rising that the move could bring in the likes of old-school institutional traders who have been on the sidelines.
Thursday was a historic day for cryptocurrencies, but the broader theme for the markets was a slightly hotter-than-expected inflation reading.
Wall Street’s major indexes finished flat, with the Nasdaq Composite flat at 14,970.19, the Dow Jones Industrial Average gaining 0.04%, and the S&P 500 falling 0.07%.
After an annual increase of 3.4% The path to the US Federal Reserve’s 2% inflation target may be more difficult than many market participants and economists expected.
It also highlights the gap between the Fed’s statement and market expectations for interest rate cuts, which could be seen as early as March of this year according to the CME FedWatch tool.
“The Higher for Longer party has taken another bullet in its own right,” said Giuseppe Setti, head of AI market research firm Toggle AI.
“Throughout the Fed’s entire history, interest rates have always been well above inflation in any scenario short of a recession. This CPI reading pushes the first rate cut further away, perhaps not even in 2024.”
But Bitcoin exchange-traded trading has quickly become an event that will give market players a reason for excitement.
This allowed ordinary investors to get a slice of the cryptocurrency pie and raised hopes that Wall Street’s larger institutional traders would also jump into the boat.
Bitcoin, the world’s oldest and most popular cryptocurrency, had a volatile session on Thursday. The cryptocurrency jumped above $49,000, hitting its highest level since December 2021, but this rise faded by the end of the day.
The Bitcoin ETF also reflects the volatile movements in the cryptocurrency.