Stocks Cut Gains After Fed’s Beige Book Signals Economic Headwinds
US stocks slashed gains after the Federal Reserve’s Beige Book signaled that the economy still faces headwinds, including supply chain shortages and a tight labor market. This follows the rise in consumer prices, which reached their highest level since 1982.
The Dow Jones Industrial Average turned negative, while the S&P 500 and Nasdaq Composite reduced their gains to 0.1% and 0.25%.
|Me: DJI||MEDIUM DOW JONES||36231.89||-20.13||-0.06%|
|SP500||S&P 500||4719.99||+6.92||+ 0.15%|
|I: COMP||NASDAQ COMPOSITE INDEX||15184.511255||+31.06||+ 0.20%|
This as the 10-year Treasury yield slipped to 1.72%.
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The Fed’s regional economic snapshot suggests that most regions are facing the crisis. “Districts said growth continued to be constrained by continued supply chain disruptions and labor shortages,” the report notes.
Previously, the consumer price index rose 7% per year, the highest level since 1982, as reported by the Bureau of Labor Statistics. On a monthly basis, the increase was 0.5%, driven by shelters and used cars and trucks.
If you exclude volatile food and energy costs, the consumer staples index rose 0.6% last month. On an annual basis, the core CPI jumped 5.5% in December. This is up from 4.9% in November. On Thursday, the producer price index is also expected to rise 9.8%.
Oil hit the level of $ 82 per barrel.
|OSU||UNITED STATES PETROLEUM FUND LP||58.71||+0.54||+ 0.93%|
POWELL CROSSED ON INFLATION, FROM JOBS TO CONFIRMATION AUDIENCE, DESPITE BIPARTISAN SUPPORT FOR THE PRESIDENT OF THE FED
The report follows remarks by Federal Reserve Chairman Jerome Powell on Tuesday when he said politics “in all likelihood” would return to normal as bond purchases and other economic stimulus are slowing down. Speaking to the Senate Banking Committee, he said ultra-low rates could be raised sooner than expected if necessary to slow inflation which is at its highest level in four decades.
In stocks, Biogen shares fell after Medicare announced on Tuesday it would limit coverage for an Alzheimer’s disease drug to $ 28,000 per year to only patients taking the drug in clinical trials. .
Dish Network shares rose after the New York Post reported that DirecTV and Dish Network discuss again a possible merger.
|Digital TV||n / A||n / A||n / A||n / A|
|PLATE||DISH NETWORK CORP.||36.59||+1.21||+ 3.42%|
General Motors is launching a new marketplace for used cars called CarBravo.
|DG||GENERAL MOTORS CO.||60.89||-0.57||-0.93%|
GM LAUNCHES USED CAR MARKET
In Europe, London’s FTSE rose 0.7%, Germany’s DAX 0.4% and France’s CAC rose 0.5%.
In Asia, the Tokyo Nikkei 225 rose 1.9%, the Hong Kong Hang Seng by 2.8% and the Shanghai China Composite Index by 0.8%.
GAS PRICES INCREASE WHILE OIL REMAINS “ALWAYS STRONG”
The World Bank cut its forecast for global economic growth this year to 4.1% from 4.3% in part due to supply chain disruptions that fueled inflation. The agency estimates that the global economy grew 5.5% in 2021.
Ken Martin of FOX Business and the Associated Press contributed to this report.