Marketbites: Employment Costs Show Cooling Inflation
Portfolio Manager Commentary:
Stocks rose on Tuesday as strong earnings and encouraging inflation data pushed the S&P 500 to its best performing January since 2019. A solid January could be a good sign for the market, and potentially foreshadow a continued uptick in the coming months.
Some of the largest firms posted earnings yesterday giving a glimpse into how they have fared against inflation and slowing consumer spending. General Motors shares jumped about 8.4% after the auto manufacturer posted strong earnings. PulteGroup shares surged 9.4% after the homebuilder reported better-than-expected earnings. Shares of Exxon Mobil also rose nearly 2.2% following earnings.
Chart of the Day:
The employment-cost index, which is an important measure of wages eyed by the Fed, showed compensation increased 1% in the fourth quarter. It was below the 1.1% estimate from Dow Jones. This new sign of cooling inflation shows the Fed may be on course to slow interest-rate increases again later today, as well as increasing the possibility of a pause in rate hikes this spring.