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We had a nice start to the earnings season from the likes of JP Morgan and Bank of America in the last couple of days, which helped fuel a steep rally yesterday, but things weren’t so good from Citigroup and Goldman Sachs today, with the former missing on earnings and the latter beating estimates but still showing a sizeable drop in quarterly profit.
By early afternoon in New York, the Dow Jones was off by 0.41% at 16,414 and the S&P 500 was down 0.17% at 1845.2. The declines were less marked than earlier in the day though; at one point the Dow was in the red to the tune of 106 points.
Jobless claims were neither here nor there today, showing just a drop of 2000 from the previous week. While this is the first week since beforeThanksgiving to be free of seasonal factors that might have distorted the data, it doesn’t speak to large improvements in the about market, more a stable state of affairs.
CPI data for last month showed a 0.3% increase at the headline level and 0.1% at the core level, which excludes the more volatile prices of food and energy. The annual changes remain below the Fed’s 2% target (1.5% headline, 1.7% core), although not too far away.
This gives the Fed leeway to keep to a slow pace when it comes to tapering, but may not greatly alter the Fed’s outlook for inflation to return to target in the long term.