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DJIA Futures: +70 (+0.2%)
SPX Futures: +10 (+0.2%)
NASDAQ Futures: +47 (+0.3%)
Good morning friends!
Futures are higher as traders await today’s Fed decision.
Let’s get right to it!
Wholesale prices were lower than expected in November in another sign of easing inflation.
The Bureau of Labor Statistics’ producer price index was unchanged on a monthly basis and up 0.9% year over year.
That was better than economists’ expectations for a 0.1% monthly increase and 1% annually.
The core PPI was also unchanged on a monthly basis and up 2% annually vs 0.2% monthly and 2.2% annually expected.
That was the slowest core reading since February 2021.
Producer prices are a leading indicator for consumer prices.
Treasury yields are pulling back ahead of the Federal Open Market Committee’s interest rate decision at 2:00 p.m. ET today.
The 10-year yield is down 4 basis points at 4.17% while the 2-year yield is down 4 basis points at 4.70%.
CME Group’s FedWatch Tool shows 98.2% of traders anticipating no rate hike today.
Focus will be on the language in the FOMC statement and Chairman Powell’s press conference about the future of monetary policy.
Fed officials have given no hints about rate cuts starting any earlier than mid-2024.
But the market has started pricing in a 25 basis point cut as early as the March meeting.
Tesla (TSLA) shares are down 0.9% ahead of the open after issuing a recall for nearly all of its vehicles sold in the U.S.
The recall covers nearly 2 million vehicles to fix a defective system that ensures drivers are paying attention while using Autopilot.
Tesla will send out a software update to fix the problems on models Y, S, 3, and X produced between October 5, 2012 and December 7, 2023.
The recall comes in response to the National Highway Traffic Safety Administration’s two-year investigation into crashes that happened while Autopilot was in use.
Mortgage demand continued to rise last week as rates fell.
The Mortgage Bankers Association reported purchase applications rose 4% weekly and were down 18% year over year.
Refinance applications jumped 19% weekly and 27% compared to a year ago.
That surge in refinance activity came as the average 30-year fixed contract rate fell to 7.07% from 7.17%.
That was the lowest level since July.