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Stock futures are flat after a 3-day winning streak for Nasdaq

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U.S. stock markets were stable in overnight trading Wednesday, following a Nasdaq Composite rise for the third session despite an alarming consumer price index.

Dow futures rose only 20 points. S&P 500 futures gained 0.05% and Nasdaq 100 futures rose 0.04%.

The shares of the homebuilder KB HomeFollowing better-than expected earnings reports, after-hours trading rose by more than 6%

On Wednesday,The major averages rose in spite of the large print CPI inflation report. The Dow Jones Industrial Average jumped about 38 points and the S&P 500 added 0.3%. For the third day straight, the Nasdaq Composite gained 0.2%.

December consumer price indexThis is a crucial inflation measure. increased 7%, according to the department’s Bureau of Labor Statistics. CPI rose 0.5% on a monthly basis. Dow Jones reports that economists forecasted that December’s consumer price index would rise by 0.4%, while it will increase by 7% year-over-year. 

This was the largest annual increase in June 1982.

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Ryan Detrick from LPL Financial stated that stocks reacted to the sticker shock caused by the historical high inflation rate, however it was well-anticipated and extremely unlikely that the stock market would experience this event. We are very excited that earnings season is just around the corner. Corporate America will be back with another strong showing. However, it will offer an opportunity to not only focus on Fed policy and policies but also get underneath the skin and find out how the economy really is doing.

A measure of inflation that is the December producer prices index will then be published on Thursday morning.

Data will also be available at 8:30 AM. Initial jobless claims for Jan. 8th will be published. Dow Jones economists forecast that 200,000 applicants for unemployment filed this week, down from 207,000 the previous week.

This week marks the start of fourth quarter earnings season. Major banks will report on Friday, just before the bell rings.

Delta Air Lines will be reporting on Thursday morning. Wall Street expects DeltaA per-share profit or revenue greater than the previous year.

Jim Paulsen is chief investment strategist of the Leuthold Group. He stated, “The stock markets are still susceptible near-term due to a poor PPI inflation report. But earnings season is about starting and given the strength of economic growth in the fourth quarter. Expect more evidence that ongoing solid company earnings will help soothe current Fed tightening, and inflation fears.”

For the week, the S&P 500 and Nasdaq are up 1.1% and 1.7%, respectively. On Monday, the Dow was slightly higher.

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