Read the highlights of this week’s commentary from Helios:
- The Consumer Price Index (CPI) recorded a 3.4% annual increase in December 2023, driven by high service costs and an end to a six-month trend of declines in goods prices. The increase, led by housing and energy costs, may indicate a more challenging path for the Fed in achieving a sustainable 2.0% inflation target.
- Inflation faces continued pressure in 2024 due to the slow pace of disinflation in core services excluding shelter (“supercore” categories) and upcoming wage increases. Over half of US states, including Florida and California, have significantly raised minimum wages this year.
- JPMorgan Chase set a record as the most profitable lender in US banking history with its seventh consecutive quarter of record net interest income, the difference between what banks earn on loans and pay out on deposits. They also hinted at the possibility of these strong earnings continuing into this year.
- Microsoft surpassed Apple as the world’s most valuable publicly traded company, bolstered by stronger earnings growth and a clearer AI strategy. Analysts’ price targets suggest Microsoft could join the $3 trillion valuation club this year. Together, they make up about 14% of the S&P 500.
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