Good morning investors! Inflation data helped stocks climb yesterday.
Today we cover:
Inflation eases
Earning reports
Big tax savings (promised by Trump)
📊 Economy and News
US Inflation Eases to 2.7% in November 2025 Amid Data Disruptions and Political Debate
US consumer prices rose 2.7% year-over-year in November, down from 3.0% in September and below economists' expectations of around 3.1%. This unexpected easing comes despite President Trump's recent claims that prices are falling "rapidly" and "very fast" under his administration.
The data was distorted by the longest-ever US federal government shutdown, which halted October collections entirely and limited November data to the second half of the month—coinciding with holiday discounts. No monthly inflation rates were published, prompting economists to view the report cautiously as potentially downward-biased.
Core inflation (excluding food and energy) slowed to 2.6%, the lowest since early 2021. However, essentials like beef (+15.8%), coffee (+18.8%), and electricity (+6.9%) saw sharp rises, fueling ongoing affordability concerns for households.
Tariffs have contributed to price pressures, though some exemptions (e.g., coffee, bananas, beef) were recently added. The White House blames lingering effects from the prior administration, while polls show growing public frustration shifting toward Trump.
The Federal Reserve, with rates at 3.5%-3.75%, may pause further cuts amid balancing inflation and a softening labor market (unemployment at 4.6%, mixed job data). Analysts anticipate clearer trends in upcoming reports.
Global hits:
Japan’s consumer inflation stays above cenbank’s target for 44th month, boosting case for a rate hike.
The Bank of Japan is poised to raise rates to its highest level since 1995.
China says U.S. will only ‘harm itself’ after Washington approves $11 billion arms sale to Taiwan.
Reminder: The House of Representatives approved the SPEED Act, which would reform U.S. permitting law to speed up the build-out of infrastructure key to artificial intelligence.
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📈 Stocks
S&P 500 6,774.76 (+0.79%)
DJIA 47,951.85 (+0.14%)
NASDAQ 23,006.36 (+1.37%)
BRENT CRUDE 76.14 (-1.37%)
* Prices as of Dec 19th, 12:20 AM UTC
Nike and FedEx Report
Nike reported Q2 earnings and revenue that beat Wall Street estimates, driven by North America sales growth offsetting weakness in Greater China. However, gross margins dropped to 40% due to higher U.S. tariffs and increased promotions, leading to a 32% plunge in net income. Digital sales fell 14%, Converse revenue dropped 30%, and the stock declined 10%.
FedEx reported a Q2 double-beat with adjusted EPS of $4.82 (vs. $4.12 est.) and revenue of $23.47B (vs. $22.78B est.). Free cash flow surged 149% YoY to $2.3B, highlighting success from the DRIVE cost-cutting program. Management raised FY revenue growth outlook to 5.5% and EPS guidance to $18.40.
Interesting: TikTok’s U.S. operations will be housed in a new joint venture, named TikTok USDS Joint Venture LLC.
Trump Media & Technology Group has reached a merger agreement with TAE Technologies, an advanced fusion developer, in a deal valued at over $6 billion.
The VC arms of Nvidia and Alphabet invest in vibe coding startup Lovable..
Surprising: Instacart will pay $60 million in refunds to consumers as part of a settlement with the Federal Trade Commission. In other news, Eli Lilly says obesity pill helps maintain weight loss after patients switch from Wegovy, Zepbound.
💵 Personal Finance
Trump Promises Record Tax Refunds in 2026 From 'Big Beautiful Bill'
President Donald Trump has touted the upcoming 2026 tax filing season as the "largest tax refund season of all time," thanks to retroactive tax cuts enacted in July 2025 via his "big beautiful bill" (formally the One Big Beautiful Bill Act).
The legislation made permanent many 2017 tax cuts and added new provisions effective for 2025, including:
A larger standard deduction
A more generous child tax credit
A higher state and local tax (SALT) deduction cap
A $6,000 deduction for seniors
Deductions for tip income, overtime pay, and auto loan interest
These changes reduced individual taxes by an estimated $144 billion in 2025, per the Tax Foundation. Since the IRS did not update withholding tables mid-year, most taxpayers overpaid via paychecks and will receive the benefits as lump-sum refunds when filing 2025 returns in 2026.
Experts note refunds will vary by individual circumstances—broadly affecting many through the standard deduction, child credit, and senior break, while targeted provisions (e.g., tips and overtime) help specific groups. Middle- and upper-income filers may benefit most, according to some analyses.
The promise comes amid low approval on inflation and living costs, with Trump highlighting potential household savings of $11,000–$20,000 annually under the cuts. Average refunds could rise significantly from recent years' ~$3,000 levels.
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