Bloomberg Surveillance Reaction to CPI and Bank Earnings
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Jan 15, 2025 Alison Williams, a Senior Global Banks and Asset Managers Analyst at Bloomberg Intelligence, dives into the recent bank earnings, spotlighting how major players like JP Morgan and Wells Fargo are navigating today's financial landscape. She examines the contrasting growth trends between U.S. and European banks, highlighting shifts in investment management. The discussion also touches on the implications of rising yields for U.S. corporations and what the latest CPI data might signal for Federal Reserve policies, creating a comprehensive view of current market dynamics.
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Inflation and the Fed
- Core CPI is a good predictor of core PCE, usually about a tenth higher.
- The challenge isn't just lowering inflation, but also managing the Fed's response and potential passive tightening.
Market Relief and Earnings
- Current market relief is due to easing inflation concerns and positive earnings season start.
- Strong earnings growth, around double digits, is a key foundation of this bull market.
China's Economic Outlook
- China's legislative agenda and its relationship with the incoming US administration are key.
- Good news could come from China shifting towards consumer-focused fiscal policy.