Global markets react positively to a Gaza ceasefire, easing inflation, and strong bank earnings, creating investment opportunities.
The annual inflation rate in the U.S. ticked up to 2.9% in December, which was in line with what experts expected. This increase is partly due to last year’s low energy prices. On a monthly basis, the Consumer Price Index (CPI) rose by 0.4%, the highest since March, mainly driven by a 2.6% jump in energy prices. However, core inflation, which excludes food and energy, eased to 3.2%, giving some relief to economists and investors worried about inflation staying above the Fed’s 2% target.
In a significant development, Israel and Hamas reached a ceasefire and hostage release agreement aimed at ending the 15-month conflict in Gaza. President Biden announced that the deal would roll out in three phases, possibly starting as early as January 19. The Israeli security cabinet still needs to approve it, but there’s hope this could lead to lasting peace and rebuilding efforts in the region.
On the financial front, the fourth-quarter earnings season kicked off with major banks exceeding Wall Street’s expectations. JPMorgan Chase saw its shares rise about 2% after reporting strong earnings. Goldman Sachs shares surged 6% following a solid performance, while Wells Fargo and Citigroup also reported impressive gains.
With all this happening, several exchange-traded funds (ETFs) are looking promising. The Invesco S&P 500 High Beta ETF, for instance, focuses on stocks that are highly sensitive to market movements. It gained about 1.9% recently. Other ETFs like the iShares MSCI USA Momentum Factor ETF and the Invesco S&P SmallCap Momentum ETF are also showing potential for growth.
