Raphael Stevens

More stories

  • 138 Shares139 Views

    in Finance

    Here’s the inflation breakdown for December 2024 — in one chart

    The consumer price index, an inflation gauge, rose 2.9% on an annual basis in December. That’s up from 2.7% in November.
    Energy, food, new and used vehicles, car insurance and airline fares were among the contributors to the increase.
    There was some good news: “Core” CPI saw disinflation, as did shelter prices.

    A customer browses eggs on partially empty shelves at a grocery store in Lawndale, California, on Jan. 2, 2025. 
    Patrick T. Fallon | AFP | Getty Images

    Inflation ticked up in December on the back of higher energy and food prices, the Bureau of Labor Statistics reported Wednesday.
    The bureau’s consumer price index, an inflation gauge, rose 2.9% during the month versus the prior year.

    That’s up from a 2.7% annual inflation rate in November, and up from a recent low of 2.4% in September.  

    While the upward move may seem disheartening, evidence suggests inflation should resume its downward drift in 2025, economists said.
    But they caution that President-elect Donald Trump’s incoming administration could stall or reverse that progress if it pursues policies such as tariffs and tax cuts, which, depending on their scope, may be inflationary.
    “The key wildcard here is policy,” Joe Seydl, a senior markets economist at J.P. Morgan Private Bank, said of inflation’s trajectory.

    The consumer price index, or CPI, measures how quickly prices rise or fall for a basket of goods and services, from haircuts to coffee, clothing and concert tickets.

    CPI inflation has declined significantly from its pandemic-era high of 9.1% in June 2022. However, it remains above the Federal Reserve’s target. The central bank aims for a 2% annual rate over the long term.
    The Fed also uses another inflation measure, the personal consumption expenditures price index. CPI readings tend to run about 0.2 to 0.3 percentage points higher than the PCE, Seydl said.
    “We’re not that far away,” Seydl said. “By the end of this year, we’d expect the year-over-year rates to be back in those targets.”

    Eggs are a ‘swing factor’

    There were some trouble spots in December.
    For example, grocery prices increased by 0.3% from November to December, according to CPI data. A rise of about 0.2% a month is consistent with hitting the Fed’s target, economists said.
    Eggs are a “swing factor” contributing to that increase, Seydl said.
    More from Personal Finance:Health-care jobs are in demand in 2025You may be paying to help make the mattress industry more eco-friendlyHow much — if any — bitcoin should you own?
    An outbreak of avian influenza, known as bird flu, in the U.S. has had a “significant impact” on egg prices, he said. The virus is highly contagious among birds and has killed millions of egg-laying chickens, reducing egg supply.
    Egg prices jumped 3.2% from November to December, the largest increase for any grocery item, according to the CPI. They’re up 37% since December 2023.

    Brandon Bell | Getty Images News | Getty Images

    Inflation for gasoline jumped, too: Prices increased 4.4% from November to December, according to CPI data.
    Consumers may not be seeing that in the real world, though: Average prices at the pump actually fell about two cents last month, to $3.01 a gallon on Dec. 30 from $3.03 on Dec. 2, according to weekly Energy Information Administration data.
    Federal statisticians adjust inflation data for seasonal patterns; gasoline prices fell less than usual in December, and the CPI registered this lower-than-normal drop as an inflation increase, Seydl said.
    Gasoline prices are down more than 3% in the past year, according to the CPI. Groceries are up 1.8%.

    Shelter inflation continues to retreat

    Meanwhile, there were some bright spots in the CPI report, such as shelter.
    The 4.6% annual inflation rate for housing in December was the lowest since January 2022. As the largest component of the price index, it has a significant bearing on inflation’s trajectory.
    Economists prefer looking at a measure known as “core” CPI, which strips out volatile food and energy prices, for a more accurate reading of underlying inflationary dynamics.
    There, the picture is better: Core CPI fell to 0.2% on a monthly basis in December, after having been stuck at 0.3% a month since August. The annual core inflation rate fell to 3.2% from 3.3%.

    “It’s encouraging that inflation continues to throttle back, slowly but steadily,” said Mark Zandi, chief economist at Moody’s.
    “The only difference between where we are and the Fed’s target is growth in the cost of housing,” he said. “That’s now definitively slowing.”
    Zandi estimates inflation could return to its target level by spring or summer, barring any speed bumps from Trump administration policy.
    Wage growth continued to cool in December even as the labor market remained strong: Average hourly earnings grew at a 3.9% annual rate last month, down from 4% in November, according to a separate Bureau of Labor Statistics report issued Friday.
    This is important because labor is a major input cost for businesses, especially those in the service sector, such as leisure and hospitality. Businesses may raise prices if wage growth spikes.

    Trump tariff threat may influence consumer buying

    Elsewhere, airline fares rose 3.9% from November to December, after rising 0.4% the prior month. Used car and truck prices jumped 1.2% during the month and those for new vehicles increased 0.5%.
    Increases for new and used vehicles “points to a continued surge in demand for replacement vehicles after October’s hurricanes, which will receive a renewed impetus from the California wildfires,” Thomas Ryan, North America economist at Capital Economics, wrote in a note on Wednesday.
    Car insurance prices increased by 0.4% on the month, and are up 11% since December 2023.
    This is largely due to a lag effect from high vehicle inflation earlier in the pandemic, economists said. Car prices feed into motor vehicle insurance: When prices are elevated, insurers’ cost to replace vehicles after a car accident is also much higher.

    At least some of the recent increase in auto prices may be because consumers are speeding up purchases — thereby raising demand — to avoid potential tariffs imposed by the Trump administration, Seydl said.
    Data from a recent University of Michigan Consumer Sentiment Survey “suggest that consumers are becoming more worried about the likely stagflationary impact of Trump’s policy plans,” Stephen Brown, deputy chief North America economist at Capital Economics, wrote Friday.
    “The expectation of tariffs to come mean consumers judge that it is a better time to buy durable goods,” he wrote. More

  • 175 Shares159 Views

    in Finance

    DoubleLine’s Gundlach says the Fed looks like Mr. Magoo, focuses too much on ‘short-termism’

    Jeffrey Gundlach speaking at the 2019 SOHN Conference in New York on May 5, 2019.
    Adam Jeffery | CNBC

    DoubleLine Capital CEO Jeffrey Gundlach believes the Federal Reserve is missing the bigger picture again.
    “The Fed looks like Mr. Magoo, driving around, bumping into things. Then became systematic, got inflation to come down,” Gundlach said in an investor webcast Tuesday evening. “But for the past five months we’ve had another rising trend. This has got the Fed back into short-termism, reacting too much to short-term data, not being strategic.”

    Gundlach, a noted fixed income investor whose firm manages $95 billion, made the comments before the latest reading of the consumer price index on Wednesday. The CPI increased a seasonally adjusted 0.4% on the month, putting the 12-month inflation rate at 2.9%
    Excluding food and energy, the core CPI rate came in slightly lighter than expected both on a monthly basis and an annual basis. While the numbers compared favorably to forecasts, they still show that the Fed has work to do to reach its 2% inflation target.

    “CPI month-over-month change has got the Fed zigzagging,” Gundlach said. “The market has gone from an aggressive assumption of Fed cuts to just one cut in 2025.”
    The Fed has cut benchmark rates by a full percentage point since September, a month during which it took the unusual step of lowering by a half point. In December, the central bank projected only two quarter-point rate cuts in 2025, fewer than the four reductions it previously forecast.

    “The Fed is now in sync with the market, and the market is not given further signals for a change,” Gundlach said. “That is consistent with the Fed slowing down its change of monetary policy.”
    Futures pricing continued to imply a near certainty that the Fed would stay on hold at its Jan. 28-29 meeting but leaned more toward two quarter-point rate cuts through the year, assuming quarter percentage point increments, according to CME Group.

    Don’t miss these insights from CNBC PRO More

  • 175 Shares189 Views

    in Finance

    There’s been a ‘meaningful shift’ in CEO confidence since Trump’s election, says Goldman’s Solomon

    “There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Goldman Sachs CEO David Solomon said, according to a transcript from FactSet.
    Donald Trump, who is set to return to the White House on Monday, is seen as broadly more business-friendly than outgoing President Joe Biden.
    Solomon’s comments line up with some survey data that suggests renewed confidence among business leaders.

    David Solomon, CEO of Goldman Sachs, speaks during the Reuters NEXT conference, in New York City, U.S., December 10, 2024. 
    Mike Segar | Reuters

    The election of Donald Trump in November and a swing back to Republican power in Washington is already starting to make an impact in the business world, according to Goldman Sachs CEO David Solomon.
    The bank executive said on a conference call Wednesday that other CEOs are feeling better about the direction of the economy and their businesses since the presidential election, even though Trump has yet to take office.

    “There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election,” Solomon said, according to a transcript from FactSet.
    “Additionally, there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improving regulatory backdrop,” he continued.
    The comments line up with some survey data that suggests renewed confidence among business leaders. The latest Chicago Fed Survey of Economic Conditions showed an improved outlook for the next 12 months. The NFIB Small Business Optimism Index rose to its highest level since October 2018 in December.
    To be sure, executives on JPMorgan Chase’s earnings call said that the optimism among business leaders has not yet resulted in loan growth, according to a FactSet transcript.
    Stocks rose sharply in the immediate aftermath of Trump’s win, as investors cheered the prospect of lower taxes and fewer regulations. However, many of those gains have since disappeared, in part due to a recent rise in interest rates.

    Trump, who is set to return to the White House on Monday, is seen as broadly more business-friendly than outgoing President Joe Biden. During his campaign, Trump floated lowering taxes and reducing regulation, including around energy. However, his proposed tariffs have made some investors and business leaders nervous about the potential for higher prices and a disruptive trade war.
    Solomon’s comments came on a conference call discussing Goldman’s fourth-quarter results. The bank beat estimates on the top and bottom lines for the period, with its profit roughly doubling year over year.

    Don’t miss these insights from CNBC PRO More

  • 163 Shares159 Views

    in Business

    Bristol Myers Squibb says Alzheimer’s is the biggest market for new schizophrenia drug

    Bristol Myers Squibb believes Alzheimer’s treatment is the largest potential market for its newly approved schizophrenia drug, Cobenfy, which it expects to eventually generate billions of dollars in sales across different uses. 
    Company executives said each treatment type they are studying has multibillion-dollar potential, including Alzheimer’s disease psychosis, agitation and cognition, along with bipolar disease and autism.
    Bristol Myers Squibb plans to release initial late-stage trial data on Alzheimer’s-related psychosis during the latter part of the year, which is earlier than expected.

    The Bristol Myers Squibb research and development center at Cambridge Crossing in Cambridge, Massachusetts, US, on Wednesday, Dec. 27, 2023. 
    Adam Glanzman | Bloomberg | Getty Images

    Bristol Myers Squibb believes Alzheimer’s is the largest market for its newly approved schizophrenia drug, Cobenfy, which it expects to eventually generate billions of dollars in revenue.
    In an interview, company executives said each treatment use they are studying for Cobenfy has multibillion-dollar potential, including Alzheimer’s disease psychosis, Alzheimer’s agitation and Alzheimer’s cognition, bipolar disease, and autism. But Alzheimer’s is the “really large market here,” Bristol Myers Squibb CFO David Elkins told CNBC on Tuesday at the JPMorgan Health Care Conference in San Francisco.

    There are nearly 6 million patients in the U.S. with Alzheimer’s, and around half of them have psychosis, or symptoms such as hallucinations and delusions, Elkins said. Cobenfy could be the first drug specifically approved for Alzheimer’s-related psychosis, said Chief Commercialization Officer Adam Lenkowsky. 
    Atypical antipsychotics – medication used to treat a range of psychiatric disorders – are often used to treat psychosis in Alzheimer’s patients even though they are not approved for that purpose. But those treatments can increase the risk of death, and Cobenfy does not, according to Bristol Myers Squibb. 
    Meanwhile, Alzheimer’s agitation, a symptom that can cause a patient to feel restless and worried, is estimated to affect around 60% to 70% of patients with the disease, according to some studies. 
    Bristol Myers Squibb on Monday said it plans to release initial late-stage trial data for Cobenfy in Alzheimer’s-related psychosis treatment during the latter part of the year, which is earlier than expected. The company also expects to start phase three trials in Alzheimer’s agitation, Alzheimer’s cognition and bipolar disorder in 2025, while studies in autism will begin in 2026. 
    JPMorgan analyst Chris Schott expects Cobenfy sales to reach about $5 billion by 2030, with a peak sales potential in the $10 billion range across multiple treatment uses, according to a research note on Tuesday. That is a huge boon to Bristol Myers Squibb as it faces pressure to offset the potential loss of revenue from top-selling treatments that will see their patents expire. 

    Bristol Myers Squibb’s Cobenfy drug
    Courtesy: Bristol Myers Squibb

    It’s a full-circle moment for Cobenfy, which became the first novel type of treatment for the roughly 3 million U.S. adults with schizophrenia in decades after it won approval in September. The drug comes from Bristol Myers Squibb’s whopping $14 billion acquisition of biotech company Karuna Therapeutics at the end of 2023. 
    But the drug’s roots are in treating Alzheimer’s.
    Eli Lilly originally tested one part of the drug – xanomeline – in the 1990s to reduce cognitive decline before shelving it due to severe side effects such as nausea, vomiting, diarrhea and constipation. Xanomeline activates certain so-called muscarinic receptors in the brain to decrease dopamine activity without causing the side effects associated with antipsychotics. 

    More CNBC health coverage

    Andrew Miller, founder and former president of research and development of Karuna Therapeutics and now an advisor to Bristol Myers Squibb, saw xanomeline’s potential in neuroscience and theorized combining xanomeline with a second existing medication – trospium – to reduce those side effects. He went on to launch Karuna to develop the combination as a schizophrenia treatment.
    Other breakthrough treatments for Alzheimer’s recently entered the market, including Biogen and Eisai’s Leqembi and Eli Lilly’s Kisunla. Those treatments work in part by clearing toxic plaques in the brain called amyloid, a hallmark of Alzheimer’s, to slow the decline in memory and thinking in patients in the earliest stages of Alzheimer’s 
    But as people progress through their disease, they experience symptoms such as psychosis and agitation, Bristol Myers Squibb’s Elkins said. 
    “That’s where Cobenfy fits it,” he said. “If you can get rid of the psychosis, the agitation, people’s cognition improves. Just imagine for the caregivers and health-care system overall, how impactful this drug could be for those patients and their loved ones. It’s really exciting when you think about it in that context.”

    Don’t miss these insights from CNBC PRO More

  • 75 Shares99 Views

    in Finance

    Will Donald Trump unleash Wall Street?

    According to Jamie Dimon, chief executive of JPMorgan Chase and king of Wall Street, bankers were elated upon Donald Trump’s election victory. Many chafed under Joe Biden’s presidency, as mergers and bank fees faced additional scrutiny, and new capital-market rules came thick and fast. Now, with the inauguration of Mr Trump imminent, American financiers will discover just how much cause they have for celebration. More

  • 125 Shares179 Views

    in Business

    Firefly Aerospace kicks off first moon mission after SpaceX launch

    Firefly Aerospace’s “Blue Ghost” cargo lander launched from Florida early Wednesday morning on SpaceX’s Falcon 9 rocket.
    The space transportation company’s first moon mission comes as it looks to expand into the nascent, NASA-led market for lunar services.
    Blue Ghost is expected to make a landing attempt on March 2 and spend up to two weeks on the surface.

    The company’s Blue Ghost moon lander before shipping out for launch.
    Firefly Aerospace

    Another American company, Texas-based rocket and spacecraft builder Firefly Aerospace, is moon-bound.
    Firefly’s “Blue Ghost” cargo lander launched from Florida early Wednesday morning on SpaceX’s Falcon 9 rocket to begin a 45-day trip.

    The space transportation company’s first moon mission comes as it looks to expand into the nascent, NASA-led market for lunar services.
    “We’re now fully focused on execution as we look to complete our on-orbit operations, softly touch down on the lunar surface, and pave the way for humanity’s return to the Moon,” Firefly CEO Jason Kim said in a statement after the launch.
    Firefly is best known for its Alpha rockets, which launch satellites into orbit. But the company in recent years expanded into building lunar landers and space tugs.

    Read more CNBC space news

    The nearly 7-foot-tall lander, named Blue Ghost after a rare firefly species in the U.S., is carrying 10 government and commercial payloads under a $101 million NASA contract.
    Firefly’s “Ghost Riders in the Sky” mission is the third under NASA’s Commercial Lunar Payload Services program. CLPS aims to deliver science projects and cargo to the moon with increasing regularity in support of the agency’s Artemis crew program. Two other companies, Astrobotic and Intuitive Machines, each launched missions last year – the former’s fell short while the latter’s tipped on its side but survived the landing.

    Blue Ghost stacked inside the rocket’s nosecone in preparation for launch.

    Firefly outlined 17 milestones it hopes to achieve with Blue Ghost, with landing one of the final steps. So far, the company confirmed the mission has achieved five of those milestones, including the stages of launch and testing the spacecraft in orbit.
    The mission is expected to land on March 2 and is targeting the lunar basin Mare Crisium on the moon’s near side. After touching down, Firefly aims to operate the lander for a full lunar day — which equates to about 14 days on Earth — as well as operate for several hours into the lunar night.

    A rendering that depicts the Blue Ghost lander on the moon’s surface.
    Firefly Aerospace

    Notably, SpaceX’s rocket carried not just one, but two lunar landers on Wednesday morning’s launch.
    Japanese company ispace is flying its second moon mission after its first crash-landed in 2023. While Firefly was the primary payload for the launch, ispace had previously booked a “rideshare” agreement with SpaceX, meaning its lander would end up hitching a ride.
    And more moon attempts are on the way this year. NASA expects as many as five U.S. companies to launch lunar landing missions this year in 2025. More

  • 138 Shares169 Views

    in Finance

    JPMorgan Chase tops estimates on better-than-expected interest income, Wall Street results

    JPMorgan Chase on Wednesday topped estimates for fourth-quarter revenue and profit.
    The bank was helped by better-than-expected net interest income and fixed income trading and investment banking results.
    Profit rose 50% to $14 billion in the quarter as noninterest expenses fell 7% from a year earlier.

    JPMorgan Chase on Wednesday topped estimates for fourth-quarter revenue and profit, helped by better-than-expected net interest income and fixed income trading and investment banking results.
    Here’s what the company reported:

    Earnings: $4.81 a share vs. $4.11 LSEG estimate
    Revenue: $43.74 billion vs. $41.73 billion expected

    The bank said profit rose 50% to $14 billion in the quarter as noninterest expenses fell 7% from a year earlier, when the firm had a $2.9 billion FDIC assessment tied to regional bank failures.
    Revenue climbed 10% to $43.74 billion, helped by Wall Street operations and better-than-expected net interest income of $23.47 billion, exceeding the StreetAccount estimate by roughly $400 million.
    Fixed income trading revenue jumped 20% to $5 billion, topping the $4.42 billion StreetAcount estimate on rising credit and currency results. Equities revenue climbed 22% to $2 billion, missing the $2.37 billion estimate.
    Investment banking fees jumped 49% to $2.48 billion, topping the $2.39 billion estimate.
    CEO Jamie Dimon said in the release that the economy was “resilient,” buoyed by low unemployment and healthy consumer spending, as well as optimism for the Trump administration’s pro-growth agenda.

    “However, two significant risks remain,” Dimon said. “Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time. Additionally, geopolitical conditions remain the most dangerous and complicated since World War II. As always, we hope for the best but prepare the firm for a wide range of scenarios.”
    Banks ended the year with several reasons to be bullish: Wall Street activity has picked up at the same time that Main Street consumers remain resilient, while the election victory of Donald Trump has led to hopes of regulatory relief.
    While the business is thriving, analysts will likely ask Dimon about his succession planning after his No. 2 executive, Daniel Pinto, said he was stepping down as chief operating officer in June. Dimon signaled last year that he was likely to step down as CEO within five years.
    Another question is how the changing outlook for Federal Reserve rate cuts will impact the bank across its sweeping operations. While Fed officials expect two more cuts this year, economic indicators could cause them to pause.
    Finally, analysts may press JPMorgan on what it intends to do with a possible windfall of capital if Trump regulators present a gentler version of the Basel 3 Endgame, as potential nominees have supported. Dimon said last May that share buybacks would be muted because the stock was expensive, but they’ve only climbed since.
    Besides JPMorgan, Goldman Sachs, Wells Fargo and Citigroup are also out with quarterly and full-year results Wednesday, while Bank of America and Morgan Stanley are due to report on Thursday.
    This story is developing. Please check back for updates. More

  • 138 Shares189 Views

    in Finance

    Citigroup swings to fourth-quarter profit, tops estimates on investment banking strength

    Jane Fraser speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, April 29, 2019.
    Kyle Grillot | Bloomberg via Getty Images

    Citigroup reported its fourth-quarter earnings Wednesday morning ahead of Wall Street’s opening bell, beating estimates on the top and bottom lines.
    Shares of the bank rose more than 2% in premarket trading.

    Here is how the company did relative to LSEG analyst consensus estimates:

    Earnings: $1.34 a share, vs $1.22 expected
    Revenue: $19.58 billion, vs $19.49 billion expected

    Citi’s net income was $2.86 billion from the quarter, an improvement from a net loss of $1.84 billion a year ago. Year-over-year comparisons for fourth quarter income metrics may be complicated by charges Citi booked in the final period of 2023.
    The bank reported growth across several different business units during the fourth quarter. Markets revenue jumped 36% year over year, with both the fixed income and equity businesses growing. Revenue for the wealth and services unites climbed 20% and 15%, respectively, year over year.
    Banking revenue grew 12%, and that expanded to 27% when including the impact of loan hedges.
    “2024 was a critical year and our results show our strategy is delivering as intended and driving stronger performance in our businesses. Our net income was up nearly 40% to $12.7 billion and we exceeded our full-year revenue target, including record years in Services, Wealth and U.S. Personal Banking,” CEO Jane Fraser said in a press release.

    On the analyst call later Wednesday, investors will also be looking for progress updates about Fraser’s turnaround efforts. Fraser took over the bank in March 2021 and has focused on slimming down the company, including selling off some international units.
    Citi’s stock was a strong performer in 2024, rising nearly 37% on the year. The stock was up more than 4% so far this year entering Wednesday. More