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How to play the market after the U.S. monthly inflation data?

By:
on Jan 12, 2023
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  • U.S. consumer prices rose in line with expectations last month.
  • Bespoke's Paul Hickey reacts to the monthly inflation data on CNBC.
  • S&P 500 is still trading below a key resistance around the 4,000 level.

S&P 500 is slightly down this morning after the U.S. Bureau of Labour Statistics said consumer prices rose in line with expectations last month.

Expert reacts to the CPI print

On a year-over-year basis, the consumer prices index was up 6.5% in December. A 0.1% decline for the month also matched expectations. Reacting to the CPI print on CNBC’s “Squawk Box”, Bespoke’s Paul Hickey said:

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Surprisingly, we see more things working in the market’s favour. That’s something from the market’s perspective that keeps us slightly positive here.

Core inflation (excluding food and energy) was up 0.3% for the month and 5.7% versus a year ago – both in line with the economists’ forecast.

The benchmark index failed to break above a key resistance around the 4,000 level on Thursday.

Time to put the money to work?

Cost of services excluding shelter – an inflation measure that the Fed Chair Jerome Powell recently dubbed “most important”, though, went up 0.4% in December.

Nonetheless, Hickey sees now as a suitable time for investors to look for opportunities in the equities market.

From a long-term perspective, I think you want to be looking and putting money to work [especially] if you get a weak day.

The monthly inflation data also saw Patrick Harker (President of the Federal Reserve Bank of Philadelphia) dub 25 basis points hike “appropriate” moving forward. Last week, a Piper Sandler analyst warned that the S&P 500 could crash to 3,225 level this year as Invezz reported here.