CNBC Daily Open: Inflation and dot plots

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

The US government shutdown is suspended
The strict American government avoided an arrest after President Joe Biden signed a stopgap government funding bill on Saturday. President-elect Donald Trump and Elon Musk frustrated an initial financing plan negotiated on Wednesday by harshly criticizing its provisions, and specifically insisting on suspending the US debt limit for two years.

Slight cold in the price increase
US headline inflation in November it’s up just 0.1% since Octoberaccording to the personal consumption price index. On an annual basis, prices rose 2.4%. Both readings were 10 basis points lower than expected. Core inflation also came in 10 basis points below the forecast. PCE is the US Federal Reserve’s preferred gauge of inflation.

The US and Asia-Pacific markets are growing
On Friday, the S&P 500 increased 1.09%, the Dow Jones Industrial Average added 1.18% and the Nasdaq Composite rose 1.03%. But all the indexes fell on the week. Asia-Pacific stocks rose on Monday, after a positive finish on Wall Street on friday of Japan Nikkei 225 advanced around 1.2% as Honda, Nissan and Mitsubishi reported informed the country’s industry ministry about the principle fusion speak

CEOs see the door
Blue-chip companies, like Boeing, Intel and Starbucksannounced changes in its chief executive officers this year. I’m not alone. There was 327 CEO departures in U.S. public companies this year through November, according to outplacement firm Challenger, Gray & Christmas. That’s the highest level since the company began tracking the data in 2010.

[PRO] Bets on Broadcom
Nvidia is undeniably the king of the artificial intelligence chip space, and it’s hard to see any company dethroning it in terms of market capitalization. But one portfolio manager told CNBC that Broadcom is “the next Nvidia in terms of performance potential

Actions sold wednesday after the Fed indicated that it sees two quarter point rate cuts in the year ahead, less than the four projects before. “We’re moving sideways on 12-month inflation,” he said Fed Chairman Jerome Powell in his press conference.

But November’s PCE came in cooler than expected. “Sticky inflation seemed to be a little less sticky this morning,” said Chris Larkin, managing director of trading and investments at E-Trade Morgan Stanley.

The Fed emphasized again and again which is “data dependent”. Would the Fed, then, have presented the world with a slightly different dot plot, had they had the opportunity to review the PCE data earlier?

Lending some credence to that train of thought, Chicago Fed President Austan Goolsbee told CNBC’s Steve Liesman that he’s hopeful November’s inflation reading “suggests that the two months of firming were more a bump rather than a change of course.” In other words, the economy is “still on track to reach 2%,” Goolsbee said.

Then again, Powell he said in July that the central bank would be “data dependent, but not data point dependent” in determining when to cut rates. Although the November PCE index signaled that inflation is returning to its downward trajectory, the one-month data did not change points. Maybe two consecutive months of fresher reading could have?

These questions are rhetorical. Conditional questions are unanswered, especially in markets. But in its indeterminate and tortuous nature, it highlights the fact that trying to time or play the market, especially in volatile times like these, might not be the best idea.

Instead, dig deep into the fundamentals—earnings, cash flow, future income—that influence stocks even as inflation and interest rates rise and fall. Remember the days when inflation reports and Fed meetings were just another day in the markets?

— CNBC’s Jesse Pound, Brian Evans and Sean Conlon contributed to this report.