Stocks skyrocketed out of the gate Tuesday after the latest economic data showed inflation continued to ease in November.
Specifically, the Labor Department this morning said its consumer price index not only grew at a slower pace than what economists were expecting, but also moderated from the growth seen in October. The data hit the wires ahead of tomorrow's highly anticipated rate-hike decision from the Federal Reserve and sent stocks notably higher to start the day.
Digging deeper into today's CPI report, data showed consumer prices were up 0.1% month-over-month and 7.1% year-over-year in November – down significantly from the respective October increases of 0.4% and 7.7%. Core CPI, which excludes volatile energy and food prices, was also lower than the month prior.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Many of Wall Street's top minds were quick to chime in on today's inflation report, including Rick Rieder, chief investment officer of global fixed income at BlackRock. "The November CPI report is notable in part due to the fact that it displays the second consecutive month of more moderate price pressures, providing some signal that the underlying trend of inflation is decelerating," Rieder says. "As with the October inflation data, November witnessed core goods prices decline sequentially, while core services held fairly steady month-over-month."
The data was released the same day as the Federal Reserve kicked off its last policy meeting of the year, with the central bank widely expected to lift its benchmark interest rate by 0.5% tomorrow afternoon. This marks a slowdown from the 75 basis point rate hikes the Fed has issued at each of its last four meetings.
Despite the cooler-than-expected inflation data and strong initial reaction from stocks, the major market indexes finished the day well off their session highs. Still, the Dow Jones Industrial Average ended the day up 0.3% at 34,108, the S&P 500 Index added 0.7% to 4,019, and the Nasdaq Composite rose 1% to 11,256.
Top Growth Stocks to Watch
What will Federal Reserve Chair Jerome Powell say tomorrow? With a 50 basis point rate hike all but priced in, according to the CME FedWatch tool, market participants will likely be looking to specifics in the Fed's announcement as well as Powell's press conference, slated for 2:30 p.m. ET.
Top of mind for investors will be indications (via the dot plot) as to how high the central bank intends to lift its Fed funds rate and how long it will keep it there in order to bring inflation down to its target, says José Torres, senior economist at Interactive Brokers. "With those concerns in mind, Fed Chairman Powell may use tomorrow's press conference to re-anchor market expectations rather than allow sentiment to strengthen," Torres adds. "On the other hand, shades of dovishness will likely propel the market higher and yields lower which would be similar to market reactions following some of his past presentations, including his November speech at the Brookings Institution."
The latter scenario would likely benefit beaten-down growth stocks the most. But not all growth-oriented companies are created equal. Here, we highlight nine of the best growth stocks that feature one of the following: solid growth prospects, attractive valuation and an impressive balance sheet. And each is top-rated by Wall Street's pros to boot.
-
October CPI Report Hits the Mark: What the Experts Are Saying About InflationCPI While the current pace of rising prices appears to have leveled off, the expected path of rate cuts has become less certain.
-
Why Is Warren Buffett Selling So Much Stock?Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
-
Fed Cuts Rates Again: What the Experts Are SayingFederal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
-
Market Reaction to Election Results: What the Experts Are SayingJobs Report Election uncertainty has been removed from the list of investors' worries, helping equities soar.
-
Jobs Growth Stalls Amid Hurricanes and Strikes: What the Experts Are SayingJobs Report A dismal October payrolls print supports the case for a slow and steady pace of rate cuts.
-
If You'd Put $1,000 Into Google Stock 20 Years Ago, Here's What You'd Have TodayGoogle parent Alphabet has been a market-beating machine for ages.
-
CPI Report Points to Gradual Pace for Rate Cuts: What the Experts Are Saying
CPI Inflation surprised to the upside last month but the disinflation trend remains on track.
-
Strong September Jobs Report Puts Soft Landing in Sight: What the Experts Are SayingJobs Report A blowout reading on nonfarm payrolls takes another jumbo-sized cut to interest rates off the table.
