📈 Is Inflation Making A Comeback?

Good morning. US stock futures fell in Friday morning trading as Wall Street parsed through the first batch of fourth-quarter earnings while it awaited the second in a pair of closely watched inflation reports.

🏷️ US prices tick surprisingly higher

📝 Our report: Looks like US consumer prices are having a comeback moment — in December at least! According to the latest Labor Department figures, prices that consumers pay for a variety of goods and services rose more than expected in December. The consumer price index increased 0.3% for the month, higher than the 0.2% estimate at a time when most economists and policymakers see inflationary pressures easing.  

 🔑 Key points:

• Excluding volatile food and energy prices, the so-called core CPI also rose 0.3% for the month and 3.9% from a year ago, compared with respective estimates of 0.3% and 3.8%.

• The inflation readings cover the same month that the Federal Reserve held its key borrowing rate steady for the third straight meeting. Along with that decision, policymakers indicated that they could begin cutting rates this year so long as the inflation data continues to cooperate.

• In recent days however, several policymakers have avoided committing to easier monetary policy.

💡 So what: Getting inflation under control is crucial for the Federal Reserve as it plays a vital role in maintaining economic stability. Persistent high inflation erodes the purchasing power of money, reduces consumer and business confidence, disrupts long-term planning, and can lead to economic distortions.

Friday - No Major Economic News

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📈 US budget deficit continues climb

WHAT: Uncle Sam hit a budgetary bump in December, flaunting a deficit of $129 billion – that's a 52% surge from the previous year! According to the US Treasury Department, fiscal outlays rose while receipts fell from December 2022 levels that were swelled by pandemic-deferred tax payments.

WHY: For the first three months of the 2024 fiscal year that started Oct. 1, the federal deficit reached $510 billion, up $89 billion, or 21% from the year ago period. A Treasury official said that both year-to-date outlays and receipts were records. Outlays rose 12% to $1.618 trillion, while receipts rose 8% to $1.108 trillion.

🤖 OpenAI ramps up content licensing drive

WHAT: OpenAI, the wizard behind ChatGPT, seems to be donning its negotiation hat, chatting up media bigwigs like CNN, Fox Corp. and Time as it seeks to structure licensing deals for use of their content. The artificial intelligence startup is looking to license content to train ChatGPT and its other AI models.

WHY: In December, The New York Times, sued Microsoft and OpenAI, accusing them of using millions of the newspaper's articles without permission to help train chatbots to provide information to readers.

⬇️ Startup funding hit the skids in 2023

WHAT: In the high-stakes world of startup investing, 2023 decided to show a bit more restraint. U.S. investors, usually the life of the venture capital party, contributed $170.6 billion to startups — a 30% decline from the $242.2 billion recorded in 2022 according to recently released data from PitchBook.

WHY: The latest data, from a year in which megadeals in artificial intelligence captured the imagination of investors, shows a persistent decline from the peak of U.S. venture funding in 2021 when startups raised $348 billion.

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