Equity Markets Rose Last Week

Stocks closed higher last week, despite a few shaky days. Each of the major benchmark indexes gained, led by the Russell 2000 and the Dow Jones Industrial Average. Consumer discretionary stocks outperformed along with energy, financials, materials and industrials. Investor sentiment improved following favorable inflation data and solid earnings from major banks. Crude oil prices increased for the fourth straight week, primarily driven by concerns of new U.S. sanctions against Russian oil producers, which raised worries of tighter global oil supplies. The dollar index declined, snapping a six-week rally.

December Inflation Data Released

The Consumer Price Index (CPI) increased 0.4% in December, in line with expectations but up from a 0.3% advance in November. Energy prices rose 2.6% last month, accounting for over 40% of the overall increase in the CPI. Food prices also increased in December, rising 0.3%. Prices less food and energy rose 0.2% in December, down from November’s 0.3% increase. The CPI rose 2.9% over the 12 months ended in December after increasing 2.7% over the 12 months ended in November. Prices less food and energy rose 3.2% over the last 12 months. Energy prices decreased 0.5% for the 12 months ended in December. Food prices increased 2.5% over the last year.

Prices at the producer level rose a less-than-expected 0.2% in December. Producer prices rose 0.4% in November. Producer prices rose 3.3% in 2024 after increasing 1.1% in 2023. The December increase was attributed to a 0.6% jump in prices for goods. Prices for services were unchanged after rising 0.3% in November. Last month, energy prices increased 3.5%, while prices for foods ticked down 0.1%.

Eye on the Week Ahead

The holiday-shortened week includes one economic report of note: the December data on sales of existing homes. November saw sales increase 4.8% for the month and 2.6% over the last 12 months.