Bonds & Stocks
US equity futures rose and Treasury yields slipped as lower-than expected producer inflation data helped temper concerns of lingering price pressures. Month-on-month US producer inflation rose 0.2% in December, compared with the 0.4% that had been expected, while the annual reading came in at 3.3% versus the 3.5% forecast.
Economy
Another solid jobs report suggests the US labor market is stabilizing, limiting the scope for Fed rate cuts this year and propelling US Treasury yields to fresh highs. It’s looking increasingly possible that the economy can withstand higher borrowing costs before growth slows and pushes down on inflation. In other words, the natural rate of interest may have moved higher.
World
Chinese officials are evaluating a potential option that involves Elon Musk acquiring the US operations of TikTok if the company fails to fend off a controversial ban on the short-video app, according to people familiar with the matter.