By Geoffrey Smith
Investing.com -- The U.S. releases consumer inflation data for December (China's inflation numbers released overnight scarcely moved the dial). Stocks are treading water ahead of the numbers, but there are updates out from heavyweights such as Volkswagen and TSMC. Disney is bracing for a fight with activist investor Nelson Peltz. FTX's bankruptcy administrators raised hopes that at least some customers' money can be recouped, and oil prices gain as confidence in rebounding Chinese demand strengthens. Here's what you need to know in financial markets on Thursday, January 12.
1. U.S. inflation set to cool
The headline rate of inflation in the U.S. fell to its lowest since late 2021 in December, encouraging hopes that the Federal Reserve will soon be able to stop raising interest rates.
Official data showed the consumer price index fell 0.1% from November, bringing the annual change to 6.5%, down from 7.1% the previous month. The monthly drop in the index was below analysts' forecasts for no change, but the annual rate was in line with consensus.
Inflation dynamics still look a little stronger once volatile elements such as food, energy and auto sales are stripped out. The 'core' CPI rose another 0.3% last month, accelerating slightly from November and leaving the annual core rate up 5.7%.
Of more importance to the inflation outlook might be that Chinese producer prices fell 0.7% on the year through December, more than expected. The numbers suggest that pipeline inflation pressure from the world’s biggest manufacturing center is easing rapidly.
2. Disney braces for a fight with Nelson Peltz
Walt Disney (NYSE:DIS) is bracing for a fight with activist investor Nelson Peltz. Disney said in a statement late on Tuesday that Peltz’s Trian Fund Management is preparing to nominate the veteran investor for a board seat.
Disney also said Mark Parker, a current Disney director better known for his work as Nike (NYSE:NKE) CEO, will take over from Susan Arnold as board chair. Parker’s main task will be to find a permanent Chief Executive, after the company fired Bob Chapek and brought back former CEO Robert Iger for a two-year interim stint.
The entertainment giant is under pressure to generate returns from a streaming business into which it has sunk billions in the last couple of years. The stock rose 1.2% in premarket trading.
3. Stocks tread water; VW, TSMC in focus
U.S. stock markets opened mixed, after futures traded flat. By 06:35 ET, Dow Jones futures were up 25 points, or less than 0.1%, while S&P 500 futures were flat, and Nasdaq 100 futures were down 0.1%, consolidating after another day of solid gains on Wednesday.
Earnings season is starting to crank up, with Blackrock (NYSE:BLK) joining Goldman Sachs (NYSE:GS) in getting ahead of the curve by announcing job cuts ahead of their full reports, aiming to concentrate investors’ minds on their efforts to restore flagging profitability.
Elsewhere, Volkswagen (ETR:VOWG_p) reported an end-of-year sales surge in China, while Taiwan Semiconductor (NYSE:TSM) rose 2.0% in premarket after its quarterly report turned out less bad than its earlier warnings had suggested.
Airline stocks will be in focus given signs of more disruptions to flight movements at U.S. airports, while videogames publishers will also be on heightened alert after Ubisoft (EPA:UBIP) announced a $530 million write-off after stopping work on three unannounced games titles in response to an alarmingly weak holiday season.
4. FTX finds $5 billion
FTX’s new management said it had located some $5B in cash and other assets, raising hopes that the customers of the collapsed crypto exchange might yet see some of their money again.
The company’s new management said it is “well under way on plans to monetize over 300 other non-strategic investments, with a book value over $4.6B,” although there’s no guarantee that any sale process will fetch book value.
Earlier this week, it was reported that Nishad Singh, a former top executive at FTX, was looking to cooperate with federal investigators who have brought fraud charges against his former boss and housemate, Sam Bankman-Fried.
5. Oil gains amid signs of Chinese demand rebound
Crude oil prices rose as belief in a substantial rebound in Chinese demand this year strengthened on the back of anecdotal reports suggesting a record-breaking week for travel ahead of the Lunar New Year holiday.
It’s the first year since 2019 that China’s 1.4 billion-strong population will have been able to travel freely at the busiest holiday of the year.
By 06:45 ET, U.S. crude prices were up 1.2% at $78.35 a barrel, while Brent crude was up 1.3% at $83.73 a barrel.