Good morning investors!
The S&P rose 0.5% after the much anticipated CPI report showed inflation was in line with expectations in November.
The PPI report is set to be released shortly, but today’s key event will be the Fed’s rate hike decision. The market expects rates to be held steady and there should be no surprises. Meanwhile, investors continue to ignore the higher rates for longer rhetoric and will be looking for any clues that point to rate cuts in 2024.
Expect some volatility this afternoon.
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Market Recap
It was green day for the major indexes and Bitcoin, while treasury yields and oil prices fell.
Stubbornly high rental costs lift consumer inflation in November
U.S. consumer prices unexpectedly rose in November as a decline in the cost of gasoline was more than offset by increases in rents, further evidence that the Federal Reserve is unlikely to pivot to interest rate cuts early next year. The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago, the Labor Department reported Tuesday. While the monthly rate indicated a pickup from the flat CPI reading in October, the annual rate showed another decline after hitting 3.2% a month earlier. Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago. The core CPI was lifted by rents, which increased 0.5% after rising 0.3% in the prior month. Read more
Google loses to Epic in court, found guilty of uncompetitive practices
A jury found Google guilty of uncompetitive practices around its Google Play store for Android apps as its trial against Epic Games wrapped. Epic Games originally sued Google in 2020, alleging it uses its dominant position as the developer of Android to strike deals with handset makers and collect excess fees from consumers. Google collects between 15% and 30% for all digital purchases made through its storefront. Epic tried to bypass those fees by charging users directly for purchases in the popular game Fortnite; Google then booted the game out of its store, spurring the lawsuit. After a four-week trial in a northern California federal court, a jury unanimously found that Google had acquired and maintained monopoly power in the Android app distribution market, as well as the in-app billing market for digital goods and services transactions. Read more
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After years of resisting, Netflix releases viewing statistics for nearly all titles
Netflix NFLX 0.00%↑ is finally revealing viewership statistics on nearly all of its shows and movies. Netflix released its first “What We Watched” report Tuesday, which ranks almost all of its shows and movies by amount of hours viewed over the past six months. Netflix will release updated reports every six months, the company said. Netflix previously kept its viewership data private as it built its business so it could experiment while not giving away data to potential competitors, co-CEO Ted Sarandos said. The report comes after Hollywood actors and writers both mentioned heightened transparency during their strikes earlier this year as they campaigned to be paid in line with how audiences consumed their content. See the full report
Valued at $86 billion, OpenAI’s latest revenue filing shows how its financials are a mystery
OpenAI is valued by private investors at $86 billion, due in part to the popularity of ChatGPT. But if you’re looking for a revenue figure for the red-hot artificial intelligence startup, the latest official number you’ll find is the tiny sum of $44,485 for last year. That’s from the nonprofit parent’s 990 filing with the Internal Revenue Service, a form that has to be filled out by organizations wishing to maintain their tax-exempt status. For all its talk of openness, OpenAI’s financials remain a black box. Created as a nonprofit in 2015, OpenAI launched a so-called capped-profit entity in 2019, enabling it to raise billions of dollars in outside funding and attain attributes of a tech startup, which went on to develop ChatGPT. Read more
U.S. crude oil falls nearly 4% as traders worry about inflation affecting demand
U.S. crude oil on Tuesday dropped nearly 4% as inflation data stoked anxiety among traders that the Federal Reserve may not be ready to ease up on interest rates. The West Texas Intermediate contract for January lost fell 4.2%, to settle at $68.67 a barrel. The Brent contract for February shed 3.67%, to settle at $73.24 a barrel. Traders are worried that the Fed does not have inflation under control and will have to keep the foot on the accelerator when it comes to interest rates, said Phil Flynn, an analyst with the Price Futures Group. Read more
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Thank you for taking the time to read today’s newsletter. Until next time investors!
Chris
CMG Venture Group
Disclaimer
I am not a licensed financial advisor or financial professional. This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
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