CNBC Daily Open: U.S. inflation edged up but investors have things to be thankful for

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Inflation in October ticked up
The personal consumption expenditures price index for October ticked up 0.2% on the month and 2.3% on a 12-month basis, according to the U.S. Commerce Department on Wednesday. Core inflation rose 0.3% on the month and showed an annual reading of 2.8%, higher than September’s 2.7%. All figures were in with Dow Jones consensus estimates.

U.S. markets break rally
U.S. stock markets fell on Wednesday, with  the S&P 500 snapping its seven-day winning streak. Bond prices rose as Treasury yields slipped. Asia-Pacific stocks mostly rose on Thursday. Australia’s S&P/ASX 200 climbed 0.45% to close at a new record. South Korea’s blue-chip Kospi index was flat after the country’s central bank lowered rates.

South Korea unexpectedly cuts rates
On Thursday, the Bank of Korea cut its benchmark interest rate by 25 basis points to 3%. A Reuters poll of economists had expected the BOK to keep rates unchanged. South Korea reported last month disappointing third-quarter economic growth of just 0.1% from a quarter earlier. The BOK on Thursday lowered its 2024 gross domestic product outlook to 2.2% from 2.4%.

Offshore yuan might drop to lowest level
China’s offshore yuan is projected to fall to an average of 7.51 against the dollar by the end of 2025, according to CNBC’s calculation of forecasts from 13 institutions. That would be the offshore yuan’s lowest level on record, going by LSEG data dating back to 2004. Tariff threats and lower interest rates in China are putting pressure on the yuan.

[PRO] Potential beneficiaries of tariffs
U.S. President-elect Donald Trump’s planned tariffs are worrying both investors and companies because higher import fees will raise costs. That said, those tariffs could benefit five technology companies that specialize in helping companies optimize supply chains.

In preparation for a heavy meal of turkey and stuffing and pumpkin pie, investors in the U.S. kept their trading appetite light.

The SPDR S&P 500, an exchange-traded fund that tracks the broad-based index, traded around 22.6% fewer shares than its 30-day average.

So even though the S&P fell 0.38% to break its seven-day winning streak and the Dow Jones Industrial Average slid 0.31%, those moves don’t seem to be a sell-off sparked by mass panic.

Instead, traders appear to be giving thanks to the year’s rally in Big Tech stocks by taking profit on them, which caused the Nasdaq Composite to drop a relatively steeper 0.6%.

The fact that inflation in the U.S., on an annualized basis, ticked up by 0.1 percentage point from the previous month didn’t seem to faze investors much either, probably because it wasn’t an unexpected increase.

In fact, traders boosted their bets that the U.S. Federal Reserve will lower rates by 25 basis points at its December meeting. The market is pricing in a 68.2% chance of that happening, higher than the 55.7% of a week ago, according to the CME FedWatch tool.

“Today’s data shouldn’t change views of the likely path for disinflation, however bumpy,” said David Alcaly, lead macroeconomic strategist at Lazard Asset Management.

Echoing his views, Scott Helfstein, Global X’s head of investment strategy, says he thinks the Fed “can eat turkey and watch football for a day knowing that they are close to full employment with price stability.”

Investors can also throw themselves into the festivities. More than three-quarters of stocks in the S&P are above their 200-day moving average, suggesting a steady upward trend and a market “still solid,” according to Chris Verrone, head of the technical and macro research at Strategas.

That’s plenty of things to be grateful for this Thanksgiving.

— CNBC’s Jeff Cox, Scott Schnipper, Alex Harring and Sean Conlon contributed to this report.