The hard work in trading comes in the preparation. The actual process of trading, however, should be effortless. Jack Schwager

1. Wholesale prices rose 0.2% in December, less than expected — The producer price index rose just 0.2% on the month, less than the 0.4% increase in November and below the Dow Jones consensus estimate for 0.4%, according to a Bureau of Labor Statistics reported. Excluding food and energy, the so-called core PPI was flat compared with the forecast for a 0.3% rise. Excluding food, energy and trade services, the measure rose just 0.1%. On an annual basis, headline PPI rose 3.3% for the full year, well ahead of the 1.1% increase in 2023. Goods prices increased 0.6%, pushed by a 9.7% surge in gasoline prices. Upward moves in several food- and energy-related measures were offset by a 14.7% slide in prices for fresh and dry vegetables.
On the services side, prices were flat, despite a 7.2% increase in passenger transportation that was offset by a fall in prices for traveler accommodation.
2. Inflation Ticks Up to 2.9%, but Underlying Price Gains Are Muted — The consumer price index rose 0.4% in December from November and finished the year up 2.9%, the Labor Department said Wednesday. Economists surveyed by The Wall Street Journal had expected the CPI to advance 0.3% last month from November and 2.9% from December 2023. Gas prices rose 4.4% last month from November, their largest monthly gain since August 2023. Federal Reserve officials and market participants tend to look past such swings in volatile food and energy prices. So-called core prices, which exclude those categories, rose 0.2% from November and finished the year up 3.2%. Economists had expected increases of 0.3% and 3.3%, respectively.
3. Mortgage Rates Top 7% for First Time Since Mid-2024 — The average rate on the standard 30-year fixed mortgage rose to 7.04% this week, according to a survey of lenders by mortgage-finance giant Freddie Mac. That marked the first time since May that it rose above 7%, an important psychological threshold for buyers and sellers. The housing market has slumped in recent years as high mortgage rates and expensive home prices made home-buying unaffordable for many Americans. It hasn’t helped that other costs of homeownership, such as insurance and taxes, have also surged. Sales of previously owned homes in 2024 likely fell to the lowest level since 1995, for the second year in a row. An uptick in rates to start the year could put a damper on the spring selling season—usually the most active time for sales—and undermine hopes that the market can break out of its sales slump.
The Federal Reserve last month lowered its benchmark interest rate for the third time in a year, which brought it down a full percentage point since September. But the central bank signaled doubt over its future path.
4. Medicare Will Pay Less for Ozempic and Wegovy in 2027. — the announcement confirms the long-anticipated inclusion of the blockbuster Novo medicines among 15 additional drugs whose prices Medicare will be allowed to negotiate with drugmakers this year. The prices won’t go into effect until 2027. While President Trump argued during his first term for policies that would have significantly lowered drug prices, those policies were not implemented, and the price-negotiation program has been a hallmark policy of the Biden administration . The negotiations are enabled by the Inflation Reduction Act, which President Joe Biden signed in 2022, and which for the first time allowed Medicare to haggle over prices with drugmakers. The Centers for Medicare and Medicaid Services negotiated lower prices for 10 drugs last year to go into effect in 2026.

The week ahead — Economic data from Econoday.com:

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