Stock futures slip after Intel disappoints; key inflation report on tap (SP500)

Economic reports are continuing to pour in with a stellar GDP print on Thursday that energized the markets. The benchmark S&P 500 (SP500) notched its fifth consecutive record following the reading, while the Dow Jones Industrial Average (DJI) reached another all-time high. The Nasdaq (COMP.IND) also tacked on gains, but tech sentiment was hurt after-hours on weak guidance from Intel, with futures tied to the index falling 0.6% overnight. At the time of writing, S&P 500 and Dow futures are also down 0.3% and 0.2%, respectively.

Quote: “People are getting ahead,” Treasury Secretary Janet Yellen said in remarks at the Economic Club of Chicago. “Instead of contracting, the economy has continued to grow. They’re seeing their fortunes improve, and I believe that if inflation stays low, they’ll begin to regain their confidence in the economy. It’s a good thing, reflective of strong, healthy spending and productivity improvements, and most likely not creating an inflationary challenge.”

Speaking of inflation, the Fed’s favorite inflation gauge, known as the core personal consumption expenditures price index, will be published Friday at 8:30 AM ET. The measure is expected to have risen 0.2% in December from November, representing an increase of 3.0% Y/Y. That would mark another success for the central bank, which continues to get closer to its 2% goal despite fears of last-mile challenges. Any incoming data will also help guide monetary policymaking, with things looking bright for the economy on the horizon.

Know your onions: Ed Yardeni, founder of Yardeni Research, sees a “Roaring 2020s” scenario as a base case, drawing parallels between the Spanish flu pandemic and COVID-19, while projecting the S&P 500 will reach 5,400 in 2024. “Our basic premise is that a chronic shortage of labor is forcing companies to use technological innovations to boost their productivity growth, which started to improve last year, according to the government’s quarterly data. As a result, inflation remains subdued, while real GDP growth, real wage growth, and profit margins all get boosted. The Fed is likely to ease, but won’t have to cut the federal funds rate by much. Stock investors do very well.”

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