Jim Cramer is an American television personality and the host of Mad Money on CNBC. He analyzed the significance of the December Consumer Price Index (CPI) report for investors this Wednesday.
According to the United States Bureau of Labor Statistics, “The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”
Cramer’s CPI Report Analysis
According to the CNBC report, Cramer said while analyzing the CPI report, “Unless inflation’s coming down in all the right places, this earnings season could be very rough”.
“What makes tomorrow’s consumer price index number a big deal? Simple: We’re looking to see if we’re nearing the end of the period where companies can raise prices with impunity,” he said.
He once said that the Fed needs to crush companies’ pricing power in order to beat inflation.
The December CPI report is set to be released this Thursday at 8:30 a.m. ET. The index shows how the prices of goods and services changed in a given month. Economists polled by Dow Jones expect the December CPI report to show that prices dipped 0.1% from the month before.
It must be noted that the stocks rose on Wednesday because investors grew more confident that the Federal Reserve’s interest rate hikes are succeeding in tamping down inflation.
Cramer said it is possible that the December CPI number could bring bad news for the economy — and for corporations set to report their quarterly results in the coming weeks. “Unless inflation’s coming down in all the right places, this earnings season could be very rough,” he said.
According to Dow Jones the consensus forecast for CPI is for a decrease of 0.1% on a monthly basis, but a 6.5% increase from the prior year.
Cramer also said that the markets’ recent gains could become a sustained rally. “The charts, as interpreted by Larry Williams … suggest that the market could have a very nice run over the next couple of months,” he said.
Jim Cramer responded to the recent update that crypto-friendly bank Silvergate received a $4.3 Billion loan form the Federal Home Loan bank to stave off a bank run. He wrote in a tweet that “This is extraordinary. A bailout loan from the Federal Home Loan Bank for a crypto bank to stem the run. I wish people knew how dangerous this is all getting. NOT business as usual.”
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