The Consumer Price Index (CPI) report for December showed a 0.3% increase, surpassing the anticipated 0.2% rise and accelerating from the 0.1% growth in November. Shelter costs were the main contributors, accounting for over half of the monthly rise. Year-over-year, the CPI advanced 3.4%, which was also above the expected 3.2% increase. The energy index saw a 0.4% month-over-month rise, with electricity and gasoline prices climbing, despite a drop in natural gas costs. Food prices also saw a 0.2% increase from the previous month. Core CPI, which excludes food and energy, went up by 0.3% month-over-month, aligning with prior figures but exceeding forecasts by 0.1%. Analysts suggest that while the uptick in shelter inflation is notable, it is not yet a cause for alarm.
Stock index futures indicated a mixed direction on Thursday morning following the CPI inflation news. Dow futures (INDU) dipped by 0.1%, S&P futures (SPX) also fell by 0.1%, while Nasdaq 100 futures (NDX:IND) remained nearly unchanged. The CPI data's slight increase over expectations served as a mild warning, suggesting that the path to disinflation may become more challenging. Concurrently, initial jobless claims for the week ending January 6th decreased to 202K, below the expected 209K, hinting at a resilient labor market.
U.S. stock index futures fluctuated after the CPI report revealed a marginally higher-than-anticipated rise in the headline number. Meanwhile, cryptocurrencies continued to capture attention following the approval of bitcoin (BTC-USD, Financial) exchange-traded funds. Hertz Global (HTZ, Financial) saw its shares dip by over 3% before market open, as the company announced plans to sell approximately 20K electric vehicles (EVs) from its fleet in the U.S., aiming to partially replace them with internal combustion engine vehicles to meet customer demand. This decision is expected to result in a significant incremental net depreciation expense in Q4 2023.
Eagle Point Credit (ECC, Financial) announced the commencement of an underwritten public offering of its Series F Term Preferred Stock, with the expectation of listing on the New York Stock Exchange under the symbol "ECCF." The terms and public offering price are currently being determined through negotiations with underwriters.
Several stocks experienced notable movements, with Moolec Science (MLEC, Financial) surging by 46% and Transphorm (TGAN, Financial) climbing 30% after announcing its acquisition to expand its power portfolio with GaN technology. Other stocks such as Spectaire Holdings (SPEC, Financial) and SAI.TECH Global (SAI, Financial) also saw significant gains. On the downside, Clearmind Medicine (CMND, Financial) dropped by 23%, and Ekso Bionics Holdings (EKSO, Financial) fell by 18% following the announcement of a registered direct offering.
Bitcoin and related cryptocurrencies saw substantial gains in Thursday morning trading, with Bitcoin reaching approximately $47.1K. Ethereum (ETH-USD, Financial) also jumped by 10%, and other cryptocurrencies like cardano (ADA-USD) and XRP (XRP-USD) experienced significant increases. This surge followed the SEC's approval of 11 bitcoin ETFs, which may pave the way for further crypto ETF approvals in the future.
Chesapeake Energy (CHK, Financial) and Southwestern Energy (SWN, Financial) unveiled plans to merge in an all-stock deal valued at $7.4B, potentially creating the largest U.S. natural gas producer. The merger will see Chesapeake shareholders owning about 60% and Southwestern shareholders about 40% of the new entity.
Sunoco (SUN, Financial) agreed to sell 204 convenience stores to 7-Eleven for approximately $1B, aiming to reduce leverage and focus on growth opportunities. Sunoco also plans to acquire liquid fuels terminals in Amsterdam and Bantry Bay, enhancing its midstream income portfolio.
U.S. airline fares saw a 9.4% year-over-year decrease in December, despite a month-to-month increase of 1.0%. The drop is partially attributed to lower jet fuel prices rather than a decline in demand. The airline industry was recently shaken by an emergency landing incident involving an Alaska Airlines (ALK) jet.
The Biden administration is set to closely examine the sale of US Steel (X) to Nippon Steel (NISTF), with national security considerations potentially influencing the deal's outcome. The sale has garnered attention due to its potential political implications in the upcoming presidential election.
Alphabet's (GOOG, Financial) (GOOGL, Financial) Google announced layoffs across its voice assistant, hardware, and engineering teams, as part of an efficiency drive. The tech giant is expected to lay off hundreds of employees, with the Voice Assistant unit and hardware team responsible for Pixel, Nest, and Fitbit being significantly affected.
Stock futures nudged higher ahead of inflation data, with companies like DocGo (DCGO) and Transphorm (TGAN, Financial) among the biggest stock movers. DocGo rebounded after a sharp decline due to allegations by a short seller, while Transphorm's shares soared following the acquisition announcement by Renesas Electronics (RNECY).
NIO (NIO) entered strategic partnerships to enhance its battery swap capabilities, collaborating with Wenergy Group, Anhui Transportation Holding Group, JAC Group, and Chery Automobile. The partnerships aim to build a shared energy storage, charging, and battery swap system, with plans to establish 1,000 stations.
Energy Transfer (ET) priced its offerings of senior notes and junior subordinated notes, aiming to raise funds for refinancing existing debt and for general partnership purposes. The offerings are expected to settle on January 25, with net proceeds directed towards enhancing the company's financial position.
