dec 10  welcome to the home for realtime coverage of markets brought to you by reuters reporters you can share your thoughts with us at marketsresearchthomsonreuterscom green christmas prices remain hot but so do wages 1110 est1610 gmt a stubbornly hobbled supply chain and an increasingly tight labor market have launched prices into orbit a state of affairs about which the us consumer who does the economic heavy lifting doesnt seem overly concerned about with santa on his way consumer prices uscpieci jumped by 08 in november marking a slight deceleration from the prior months 09 gain and coming in 01 percentage points higher than expected linebyline the labor departments consumer price index cpi which measures the prices urban us consumers pay for a basket of items showed gasoline air fares and autos saw some of the hottest growth with a 35 jump in energy prices lifting the headline number yearoveryear cpi jumped 68 uscpnyeci the highest reading in 39 years and its not over yet ongoing supply disruptions will continue to place upward pressure on consumer prices writes kathy bostjancic chief us economist at oxford economics the closelywatched core cpi uscpfyeci which strips out volatile food and energy prices accelerated by 03 percentage points to a 49 annual growth rate inline with expectations taken together with economic data released earlier this week which showed the quit rate hitting a record and job openings hovering at 11 million all signs are pointing toward price spikes long overstaying their welcome and suggest the us federal reserve could very well start tightening its accommodative monetary policy sooner than many might have hoped it’s not going to cause jitters in the market because elevated inflation is already priced into the market says peter cardillo chief market economist at spartan capital securities in new york  but this does mean we’re probably going to be faced by a more hawkish fed and a change in monetary policy is likely to happen in the latter part of the second quarter of 2022 heres a look at the core cpi trendline which continues to soar well above the feds average annual 2 target now would be an excellent time to revisit our old crotchety friend the misery index the misery index takes various forms but for our purposes its the unemployment rate plus annual headline cpi growth even with the jobless rate having edged down to 42 elevated consumer prices are holding the misery index well above prepandemic levels so what do consumers make of this lump of inflationary coal in their stocking as the holiday season approaches with wages rising along with consumer prices they dont seem overly concerned the university of michigans preliminary take on current month consumer sentiment usumspeci showed the consumers mood brightening the indexs december reading unexpectedly gained 3 points to a print of 704 moving in the opposite direction than economists predicted both current conditions and expectations components gained ground with one and fiveyear inflation expectations holding firm at 49 and 3 respectively but what richard curtin chief economist at umichs surveys of consumers finds most interesting was the substantially brightened mood among the surveys lowestearning respondents while small differences in the direction of change are rather common it is quite unusual to record such a large change in the bottom third a larger onemonth percentage was recorded only once before a gain of 292 in june 1980 curtin writes the reason for this rising wages the core of the renewed optimism among the bottom third was the expectation of income increases of 29 during the year ahead the last time a higher gain for this group was expected was in 1981 curtin adds this suggests an emerging wageprice spiral that could propel inflation higher in the years ahead as the graphic below shows however consumer attitudes regarding the current state of affairs and what they see in their immediate future remain well below prepandemic levels while the cpi report came in hot the markets expected it to do just that and wall street allergic to surprises gained ground in early trade however the enthusiasm has waned the major indexes are now mixed with the dow dji and nasdaq ixic slightly red the sp 500 spx is clinging to a slight gain us stocks struggle to hold gains in early trade 1001 est1501 gmt wall streets main indexes are rallying on friday after data showed consumer prices rose largely in line with estimates last month taking some pressure off investors concerned about aggressive tightening of monetary policy that said initial pops have quickly deflated with the indexes now posting just modest gains the us 10year treasury yield is falling back to the 147 area and growth igx is slightly outpacing value ivx chips sox and tech splrct are among outperformers while banks spxbk are among the losers even though crude and natural gas futures are both gaining energy spny is red in early trade here is where markets stand is the dragon running out of fire 0919 est1419 gmt the nasdaq golden dragon china index hxc which tracks the performance of uslisted china stocks is down 386 this year on course for its worst yearly performance since 2008 this is not the year of the dragon the index fell 91 on dec 3 its worst performance in over 13 years after didi global inc didin said it planned to delist from the nyse with the ride hailing giant dropping 221 and bringing down other chinese adrs with it read more things went south pretty quickly after the index hit a record high in february 2021 losing half its value as regulatory pressures from beijing and washington weighed frank benzimra head of asia equity strategy at societe generale finds that in chinese equity common prosperity stocks from green tech to new infrastructure outperformed this year being on the right of china authorities’ policy agenda mattered more than valuations benzimra said in a note the good news for didi that is now planning a hong kong listing is that hklisted shares have outperformed their uscounterparts although when it comes to chinese equity onshore stocks have been relatively resilient to both according to benzimras note on the retail end analysts at vanda research found that retail purchases of china adrs were negligible after didis delisting after multiple attempts to buythedip we suspect retail investors have gotten tired of trying to catch a falling knife wrote giacomo pierantoni and ben onatibia in a note in the wake of mostly inline november cpi data  cbt emini dow futures are posting premarket gains suggesting the dow jones industrial average dji is poised to rise around 200 points when regularsession trading kicks off on friday in that event the dji can challenge the 764786 fibonacci retracement zone of its novemberdecember slide at 35961873601816 traders will be watching for how the dow deals with this barrier the next levels above this zone include the november 16 high at 3631661 the november 8 record close at 3643222 and the november 8 record intraday high at 3656573 the resistance line from early 2018 which capped strength in november is now close to 37000 a failure to overwhelm the retracement zone followed by a reversal below thursdays low at 3557714 however can add credence to the view that december strength has just been a countertrend bounce read more for fridays live markets posts prior to 0900 est1400 gmt  click here read more terence gabriel is a reuters market analyst the views expressed are his own