Indices
- Dow 44,546, +143 or +0.32%.
- Nasdaq 20,026, +503 or +2.58%.
- S&P 6,114, +89 or +1.48%.
- MSCI EAFE 2447.68, +62.34 or +2.61%.
- USD10Y 4.472%, -1.5bp or -0.33%.
- WTI Crude $70.57/bbl, -$0.49 or -0.69%.
Hot CPI & PPI Not as Bad as Feared?
Both the Consumer Price Index (retail prices) and the Producer Price Index (wholesale prices) came in hotter than expected for January. However, the markets rallied modestly this week and the yield on the 10-yearr U.S. treasury bond fell both of which are counterintuitive. Within the PPI report, several key segments demonstrated declines; physician care, domestic airfare, and brokerage services. As a result, Citigroup now expects the January Core Personal Consumption Expenditure data to decline to +0.22% which should decrease the year-over-year figure to +2.5%. That being said, markets have now priced in only one rate cut for 2025.
Q1 Earnings Update
Q1 earnings season is more than three quarters complete (77% of the S&P has reported) and has demonstrated the health of the U.S. economy with 76% of those firms reporting upside earnings surprises and 62% upside revenue surprises. Earnings growth (year-over-year) has been +16.4% and if that figure holds, will represent the largest growth rate recorded since Q4 2021.
The Upcoming Week: Feb 17 – Feb 20
It is a very slow holiday shortened week highlighted only by the release of the Fed’s minutes from its January meeting and Walmart’s (WMT) earnings release.
Economic Calendar
- Monday – Markets Closed in Observance of President’s Day. Earnings: N/A.
- Tuesday – N/A. Earnings: N/A.
- Wednesday – January FOMC minutes. Earnings:N/A.
- Thursday – Initial Jobless Claims. Earnings: Walmart (WMT).
- Friday – February Flash U.S. S&P Services and Manufacturing PMI, Final February Consumer Sentiment. Earnings: N/A.
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