November CPI Results: 7.1% vs 7.3% Expected: Market Pops

JPMorgan and Tom Lee say buckle up — the November CPI is going to take us 10% higher. Morgan Stanley analyst Mike Wilson thinks its time to fade the rally and brace for double digit declines early next year — due in part to faltering earnings. But who's right? This week may hold the key.

Justin Nugent

This article was last updated on 12/14/2022.



YoY 7.1% VS 7.3% EXPECTED


Interestingly, this is lower than the CPI forecasts by 12 of the top investment banks:

  • 7.2% – Barclays
  • 7.2% – Credit Suisse
  • 7.2% – Goldman Sachs
  • 7.2% – Bloomberg Econ
  • 7.2% – Citigroup
  • 7.2% – Morgan Stanley
  • 7.2% – Wells Fargo
  • 7.3% – HSBC
  • 7.3% – JP Morgan Chase
  • 7.3% – UBS
  • 7.3% – Bank of America
  • 7.4% – SocGen


This is likely a sign that these banks are underexposed to a potential upside inflation surprise.

As of the premarket, the SPY is up 2.71% in the premarket off of the news.

QQQ is up 3.84% off of the news

Despite ripping early in the day, the market largely sold off the move, with the S&P 500 finishing at a modest +0.76%.


Traders who like big market movement (we’re looking at you, optionista’s) are in for a big treat this week: The CPI and FOMC back-to-back. These two events have repeatedly generated some of the largest intraday movement for stocks all year long, and the market’s opinion of what would happen on these events has arguably been the single most important factor for traders to navigate in 2022. 

With December’s FOMC being the last Fed meeting of the year, it’s all but certain to lead to some fireworks. 

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What the market expects during the November CPI, Tuesday Morning at 8AM EST

Date Actual CPI YoY Expected CPI YoY Previous CPI YoY
November CPI (December 13th) TBA 7.3% 7.7%
October CPI (November 10th) 7.7% 8.0% 8.2%
September CPI (October 13th) 8.2% 8.1% 8.3%
August CPI (September 13th) 8.3% 8.1% 8.5%

Last month, during the November 10th CPI, the stock market had one of its best days in recent history, with the S&P 500 rising +5.5% in a single day. That wasn’t random; it was off the back of core inflation falling 50 basis points from the previous read. That very positive day gave the market something to cheer about — and in turn, it priced-in a huge expectation going into the November CPI. 

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Now, the market expects core inflation to fall at least another 40 basis points from the previous read. While energy prices have been trending lower, we know from the PPI and the jobs report that we aren’t necessarily out of the woods yet. 

Ultimately, what the market cares about isn’t really the inflation falling — it’s how the Fed reacts to the inflation print. Lucky for us (and for traders who like volatility), that outcome will be public the following day. As it stands, here’s where U.S. interest rates stand relative to the rest of the country, according to


Notwithstanding extreme outliers like Argentina (whose current rate is 75%), the US is already pretty far on the rate hike spectrum relative to other countries. Additionally, at the previous FOMC meeting, Fed Chair Jerome Powell told market participants that the Fed doesn’t need to see inflation slow down in order to begin to pause in the process of hiking rates — that was seen as a relatively dovish comment.

As a result, some market participants, like Fundstrat’s Tom Lee, believe that a soft CPI print could lead the market into an enormous rally. 

To put it into numbers, according to JPMorgan’s (JPM) sales and trading desk…

10% from Monday’s close would theoretically take the SPY to $438.

On the other hand, Morgan Stanley CIO Mike Wilson is predicting the opposite — a massive, double-digit drop for the market by early 2023.

But only time will tell, and we won’t have to wait long. Tuesday morning, we’ll be a lot closer to at least one of these predictions — and we’ll be sure to update this article with all the relevant information to make sure you stay armed with the knowledge you need to trade smarter.

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