Market pushes higher as investors prepare for tomorrow's inflation data

Note: Figures recorded at 7:40am AEDT. Updated figures and a video recording will be available at 9am AEDT.

Stocks traded higher Wednesday, with investors awaiting the release of fresh US inflation data and earnings.

The S&P 500 rose 0.6 per cent, while the Dow Jones Industrial Average gained 185 points, or about 0.5 per cent. The Nasdaq Composite advanced 0.9 per cent.

Intuitive Surgical and Lennar led the broader market higher, gaining more than 10 per cent and 3 per cent, respectively. Intuitive increased its procedure growth outlook for fiscal year 2024 after market close on Tuesday, when Lennar had also announced an increase to its annual dividend.

Investors await the latest consumer price index report slated for release Thursday. Economists polled by Dow Jones expect CPI rose 3.2 per cent year over year in December.

Investors will look through the reports for clues on when the Federal Reserve may start cutting rates. Some of those expectations have been dialled back in recent days, although the odds hover at around 64 per cent, according to CME Group FedWatch tool.

Earnings heats up Friday with results from major financial heavyweights including JPMorgan Chase and Bank of America, along with UnitedHealth and Delta Air Lines.

Stocks are coming off a mixed session. The S&P 500 and Dow closed lower Tuesday, while the Nasdaq posted a slight gain.

The US Securities and Exchange Commission is expected to announce its decision on bitcoin exchange-traded funds (ETFs) today, while the Chicago Board Options Exchange plans to launch eight new ETFs on January 11. In anticipation of this decision, companies are intensifying competition by reducing fees on their proposed bitcoin ETFs to attract investors, with BlackRock lowering fees on its iShares ETF and offering an introductory rate of 0.12 per cent for the first 12 months or the first $5 billion in assets.

Looking ahead, the anticipated scenario for tomorrow's Consumer Price Index (CPI) suggests a potential increase in the headline CPI while expecting a decrease in the core CPI. If this scenario materialises, it may lead to a mixed market reaction, possibly leaning slightly towards the negative side. This development could either validate or contradict two out of the five key market assumptions that have been supporting the rise in stock prices: the persistence of declining inflation and the likelihood of imminent rate cuts. 


The SPI futures are pointing to a 0.11 per cent rise.


One Australian dollar at 7:40 AM was buying 66.97 US cents.


Gold has lost 0.23 per cent. Silver has lost 0.03 per cent. Copper has gained 0.71 per cent. Oil has lost 1.33 per cent.

Figures around the globe

European markets closed mixed yesterday. London’s FTSE lost 0.42 per cent, Frankfurt gained 0.01 per cent, and Paris closed 0.01 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 2.01 per cent, Hong Kong’s Hang Seng lost 0.57 per cent and China’s Shanghai Composite closed 0.54 per cent lower.

Yesterday, the Australian share market closed 0.69 per cent lower at 7,468.46.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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