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Dow edges higher Friday, but heads for worst week since September on rate fears


Peak inflation is likely behind us, says Kroll Global chief economist

Stocks wavered between gains and losses Friday, but headed for a down week as worries over continued rate hikes persisted.

The Dow Jones Industrial Average traded flat, but was on pace for its worst week since September. The S&P 500 and Nasdaq Composite last traded 0.2% and 0.5% higher, respectively.

The Dow is off by 1.8% this week, while the S&P 500 has fallen 2.5%. The Nasdaq has lost 2.9%.

Friday’s moves came as November’s producer price index showed higher-than-expected wholesale prices, which rose 0.3% last month and 7.4% over the previous year. Core PPI, which excludes food and energy, also came in above expectations.

Optimistic consumer sentiment data helped to alleviate some fears, but attention remains laser-focused on next week’s busy economic calendar. All eyes are on the consumer price index, which is expected to show whether prices have subsided.

Later in the week, the Federal Reserve is expected to deliver a 50 basis point hike at the end of its December policy meeting. While the increase would be smaller than the previous four hikes, concerns have mounted over whether the central bank can architect a soft landing and prevent a recession.

Investors have long hoped for a pivot from the Fed’s aggressive tightening cycle, but the data fails to support that desire, said Stephanie Lang, chief investment officer at Homrich Berg.

“It’s our expectation that we really need to see inflation come down closer to the Fed funds rate for the Fed to pause, and we still have quite a bit of delta between those numbers,” she said. “There’s still a bit of work to be done on the inflation front to really see that as the reality.”

In other news, shares of Lululemon fell after the company gave a weaker-than-expected fourth-quarter outlook. Bath & Body Works’ stock gained as Dan Loeb revealed a boost in his stake.



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