Week of Feb 16, 2024 Weekly Recap & The Week Ahead
“Hope is [a] bogus emotion that only costs you money.”
1. Inflation at 3.1% Reflects Stubborn Pricing Pressure, Clouding Outlook for Fed Rate Cuts — the Labor Department reported Tuesday that consumer prices rose 3.1% in January from a year earlier, versus a December gain of 3.4%. That marked the lowest reading since June. Still, the consumer-price index was higher than the predicted 2.9%, a disappointment for investors who hope the Fed will cut rates sooner rather than later. Rate cuts tend to help stock prices by boosting economic activity and reducing competition from bonds for investor dollars. But Tuesday’s inflation report underscores why Fed officials have been dismissive of such expectations, and it could provide ammunition to officials who want to wait until the middle of the year before cutting interest rates. Some Fed officials have suggested that the pace of improvement over the past six months might overstate underlying progress in containing price pressures.
2. US Producer Prices Increased by More Than Forecast in January — the producer price index for final demand increased 0.3% from December, Labor Department data showed Friday. The gauge rose 0.9% from a year earlier, also exceeding forecasts. The so-called core PPI, which excludes volatile food and energy categories, climbed 0.5% from the prior month, and 2% from a year ago — both topping expectations. The advance reflected increases in services categories, including hospital outpatient care and portfolio management.
3. Housing starts post sharpest drop since April 2020 — housing starts fell to a 1.33 million annual pace from 1.56 million in December, the government said Friday. That’s how many houses would be built over an entire year if construction took place at the same rate every month as it did in January. Housing starts fell to the lowest level since August 2023.
The drop in January was the sharpest since April 2020, during the coronavirus pandemic, when starts fell by nearly 27%. Not including that pandemic drop, housing starts fell by the most since 2015.
4. New OpenAI Technology Can Create Realistic Video From a Line of Text — OpenAI calls the new system Sora. It takes a written prompt and, through AI, renders a richly detailed video. OpenAI is one of many companies like Alphabet’s Google and Meta Platforms seeking to capitalize on new AI-video developments. Microsoft-backed OpenAI, maker of the ChatGPT AI chatbot, said it is sharing the text-to-video technology with a select group of researchers and academics who will study it to find ways the AI program could be misused. It hasn’t been released to the public. OpenAI previously released a program called Dall-E 2 that produces still images based on text descriptions.
The week ahead — Economic data from Econoday.com:
