US CPI: Inflation for November Lands at Expected 2.7%. Nasdaq Gets Lift to 20,000

Price pressures are moving in line with expectations with November’s print injecting confidence that a rate cut is still on the table for next week.

• US inflation for November ticked up to 2.7%, in line with expectations, according to the latest consumer price index USCPI data. Cheerful traders rushed to buy up everything out there, lifting all three major indexes for the day. The Nasdaq Composite was especially favored as it crossed 20,000 points for the first time ever after it added a solid 1.8% to its valuation a few hours into the session. Still, some signs of caution were found in the report, which were largely shrugged off by markets.
• The print was another monthly bump after October’s readout came in at 2.6%, a rise from September’s 2.4%. Core prices for November, which exclude volatile food and energy items, rose 3.3% over the past 12 months. On a monthly basis, the consumer price index showed prices increased 0.3%, the strongest clip since April. The rise was mostly driven by stubborn inflation in the cost of food and medical care.
• Now that all these figures are in line with forecasts, markets got all the confidence, well almost all, that the Federal Reserve will slash interest rates next week. As much as 99% of traders, up from 90% prior to the report, now believe that the Fed will reduce borrowing costs by 25 basis points, according to the CME Group’s FedWatch tool. The Fed is meeting next week, December 17-18.