1:15 PM New York – U.S. stocks on Wall Street traded higher after the latest decline in CPI was larger than expected. The fifth monthly only price decline drove the fall in the reported measure of inflation that many believe understates the inflation. U.S. lifted diplomatic sanctions on Cuba after five decades.
Stocks on Wall Street traded higher and the latest data on inflation showed a decline more than expected after gasoline prices tumbled.
U.S. Treasury debt declined and the dollar gained against a basket of currencies as investors shunned currencies of emerging markets for the third week in a row.
U.S. CPI Falls 0.3%
U.S. consumer price index dropped the most in six years in November as gasoline price at pump stations for the fifth month in a row.
Consumer Price Index declined 0.3%, the largest monthly decline since December 2008, according to the Labor Department. The index was flat in October.
The CPI, proxy to the inflation, reported by the government has consistently understated the underlying inflation in the country, as the index does not take into account the rising cost of education, medical care and other services.
For the year to November, the CPI increased 1.3%, after rising 1.7% in October.
The government report also showed average weekly earnings after adjusting for inflation increased its largest gain in six years.
Core CPI, excluding food and energy prices, increased 0.1% after rising 0.2% in October. For the 12-month period to November, the core CPI gained 1.7% after rising 1.8% in October.
However, cost of owning or renting home increased 0.3% after rising 0.2% in October. In addition, airline fares, alcohol beverages and medical care rose and prices of new and used motor vehicle, apparel and household furnishings declined.
U.S. to End Cuba Sanctions and Isolation
President Barack Obama at a White House briefing this afternoon announced the end of diplomatic isolation of Cuba since 1961.
Cuba has been seeking for economic help as long time patrons Russia and Venezuela are facing economic crisis brought on by the plummeting oil prices.
The deal between the two nations was sealed after an extra-ordinary 45-minute telephone call between President Obama and Cuban leader Raul Castro.
The agreement between the two estranged nations have been in the making for more than a year after Canada and Vatican played key roles and served as a meeting place for delegations of two countries.
The U.S. eased travel restrictions and raised the limit to relatives to $8,000 from $2,000 annually and also permitted the use of credit and debit cards in the island nation.
Stocks in Japan and in Asia stabilized but the Nikkie index lacked direction. The yen gained a fraction and oil and gold closed up. Japan Tobacco plunged more than 7% on the worries of Russia sales and a possible increase domestic tax.
Japanese and Asian markets stabilized after three days of volatile trading.
Nikkei 225 index traded between gains and losses in the session but the swings in prices were tighter in active trading.