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CPI Summary

|Includes:AA, AAL, AEP, AN, ARO, BP, CAG, CEO, COP, CPRT, D, DAL, DIA, DRI, EAT, ECA, F, FCX, GIS, HMC, HOV, HSH, JCP, K, KAR, KMX, LB, M, MCD, OXY, PPC, QQQ, SFD, SHLD, SNP, SO, SPY, SVU, TM, TOL, UAL, Wal-Mart Stores, Inc. (WMT), XOM, YUM
Today’s Consumer Price Index (NYSEARCA:CPI) report for December 2009 came right in line with economists’ expectations for modest monthly price rise.

The Consumer Price Index (CPI) for December showed a Headline CPI Index gain of 0.1%, matching economists' expectations for the same. The modest rise contrasted against the 0.4% increase reported in November. The slight increase was largely influenced by likewise soft moves in food and energy prices.

The Food Index rose only 0.2% in December, with prices for food used in home cooking rising 0.3% and food eaten outside the home increasing 0.1%. Grocery stores like SuperValu (NYSE: SVU) showed broad based increases. Among the major grocery store food groups, the index for meats, which should interest you Smithfield Foods investors NYSE: SFD; poultry (Pilgrim's Pride NYSE: PPC); fish, and eggs (ConAgra NYSE: CAG) was unchanged while the other five groups all posted increases. The index for cereals (NYSE: GIS, NYSE: K) and bakery products (NYSE: SLE) rose 0.6 percent, while the dairy and related products index increased 0.5 percent after declining 0.7 percent in November. The indexes for fruits and vegetables and for other food at home both rose 0.3 percent, while the index for nonalcoholic beverages increased 0.2 percent. The index for food consumed away from home (NYSE: DRI, NYSE: EAT, NYSE: YUM, NYSE: MCD) increased in December, rising 0.1 percent after increasing 0.2 percent in November.

Energy prices only increased 0.2% last month as well, marking the smallest segment increase in five months. Looking into the details, the overall energy price increase was driven by gains in Energy Commodities (+0.5%) (NYSE: XOM, NYSE: CEO, NYSE: SNP, NYSE: OXY), Gasoline (+0.2%) (NYSE: BP, NYSE: COP) and Fuel Oil (+1.1%), which outweighed decreased Natural Gas pricing (-0.7%) (NYSE: ECA) and unchanged Electricity prices (NYSE: AEP, NYSE: SO, NYSE: D).

Core Prices

The Core Consumer Price Index also increased by 0.1%, again matching economists' modest expectations for the same. The factors behind core price increase included Used Cars & Trucks (+2.5%) (Autonation NYSE: AN, NYSE: KMX, Nasdaq: CPRT, NYSE: KAR); Apparel (+0.4%) Macy's (NYSE: M, NYSE: JCP, NYSE: LTD, NYSE: ARO); Commodities (+0.2%) (Alcoa NYSE: AA, NYSE: FCX); Transportation Services (NYSE: CAL, NYSE: DAL, NYSE: AMR); and Medical Services. Prices declined in the important new vehicles market (NYSE: F, NYSE: HMC, NYSE: TM), playing an integral role in keeping overall prices quelled.

The Shelter Index was unchanged in December, as the indexes for rent and owners' equivalent rent were both unchanged after declining in November, while the index for lodging away from home rose 0.5 percent (NYSE: AIV).

In Conclusion

With demand for goods and services still waning, and with consumers still seeking value and discounts, as evidenced by market share gain at Wal-Mart (NYSE: WMT) and Kmart (Nasdaq: SHLD), prices have likewise remained tame. However, as Yogi Berra might say, inflation will stay away only until it appears, and the consensus seems to agree that it will appear with a vengeance eventually. Be sure that it will sneak up on most of the talking heads now singing Ben Bernanke's tune on talk radio, just like every major economic and market shift has duped the herd.


Disclosure: No Positions
Stocks: WMT, SHLD, SVU, SFD, HSH, PPC, CAG, GIS, K, DRI, EAT, YUM, MCD, XOM, CEO, SNP, OXY, BP, COP, ECA, AEP, SO, D, AN, KMX, CPRT, KAR, M, JCP, LB, ARO, AA, FCX, UAL, DAL, AAL, F, HMC, TM, TOL, HOV, DIA, SPY, QQQ