US Bond Yields Dip, Stocks Nearly Flat

• U.S. Treasury yields dipped on Tuesday, January 14, 2025, after data showed U.S. producer prices rose less than expected in December, while stock indexes were little changed as investors remained cautious ahead of U.S. consumer price data on Wednesday and President-elect Donald Trump's inauguration next week.
• The U.S. producer price index climbed 0.2% month-on-month in December, below expectations for a 0.3% increase and down from 0.4% in November.
• Investors have been worried about persistent U.S. inflation. The PPI report did not change the view that the Federal Reserve would not cut interest rates again before the second half of this year, and investors still await the more closely watched U.S. consumer price index report.
• Of note, CPI data is expected to show month-on-month inflation held at 0.3% in December while the year-on-year figure climbed to 2.9%, from 2.7% in November.
• The potential for tariffs that could boost inflation once Trump is in office also hangs over the market. Most stock indexes were higher following the PPI report, but the S&P 500 and Nasdaq lost gains by late U.S. morning.

(Source: Reuters)