A daily market update from FS Insight — what you need to know ahead of opening bell.
“The strength of a nation derives from the integrity of the home.” – Confucius
Car drives into crowd in Munich, Germany, wounding almost 30 people in suspected attack, officials say CBS
Major SoCal storm triggers evacuation orders in LA County amid flood threats AX
Twelve people injured after man throws grenade into French bar LM
Honda-Nissan multi-billion dollar merger collapses BBC
Europe reels after Donald Trump announces US-Russia talks on Ukraine FT
Trump vows reciprocal tariffs today without giving details BBG
Inspectors General sue Trump administration after being fired by President WSJ
Trump says he may sign reciprocal tariff order on today RTR
NYSE to relocate 143-year-old Chicago stock exchange to Texas FT
Cisco’s earnings beat expectations, issue upbeat guidance BAR
Alibaba to partner with Apple on AI features, sending shares to 3-year high RTR
Chevron to cut as much as 20% of workforce BBC
Robinhood stock soars as crypto rally fuels earnings explosion BAR
Ozempic helps people drink less alcohol, study says QZ
Illinois political boss Mike Madigan found guilty of bribery and wire fraud FT
Beginnings of Roman London discovered in office basement BBC
Chart of the Day
| Overnight |
| S&P Futures +0
point(s) (+0.0%
) Overnight range: -19 to +18 point(s) |
| APAC |
| Nikkei +1.28%
Topix +1.18% China SHCOMP -0.42% Hang Seng -0.2% Korea +1.36% Singapore +0.21% Australia +0.05% India -0.06% Taiwan +0.47% |
| Europe |
| Stoxx 50 +1.11%
Stoxx 600 +0.54% FTSE 100 -0.79% DAX +1.27% CAC 40 +1.1% Italy +0.58% IBEX +0.07% |
| FX |
| Dollar Index (DXY) -0.3%
to 107.61 EUR/USD +0.32% to 1.0416 GBP/USD +0.38% to 1.2493 USD/JPY -0.39% to 153.82 USD/CNY -0.18% to 7.2936 USD/CNH -0.19% to 7.2964 USD/CHF -0.72% to 0.907 USD/CAD -0.06% to 1.4298 AUD/USD -0.19% to 0.6268 |
| Crypto |
| BTC -1.48%
to 96218.98 ETH -0.1% to 2680.45 XRP -0.47% to 2.4481 Cardano -1.68% to 0.7787 Solana -1.63% to 192.63 Avalanche -2.83% to 25.75 Dogecoin -1.79% to 0.2585 Chainlink -0.16% to 18.8 |
| Commodities and Others |
| VIX +0.57%
to 15.98 WTI Crude -1.47% to 70.32 Brent Crude -1.37% to 74.15 Nat Gas +3.42% to 3.69 RBOB Gas -1.22% to 2.064 Heating Oil -1.6% to 2.413 Gold +0.53% to 2919.29 Silver +0.18% to 32.3 Copper +0.17% to 4.713 |
| US Treasuries |
| 1M -0.8bps
to 4.3192% 3M -1.1bps to 4.3165% 6M -1.4bps to 4.3475% 12M -3.3bps to 4.2396% 2Y -1.9bps to 4.3362% 5Y -2.1bps to 4.4463% 7Y -1.9bps to 4.5279% 10Y -2.3bps to 4.5974% 20Y -2.5bps to 4.8663% 30Y -2.8bps to 4.8042% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 2.1bps to -0.4
bps 10Y-2 Y Spread narrowed 0.7bps to 25.7 bps 30Y-10 Y Spread widened 0.2bps to 20.5 bps |
| Yesterday's Recap |
| SPX -0.27%
SPX Eq Wt -0.58% NASDAQ 100 +0.12% NASDAQ Comp +0.03% Russell Midcap -0.58% R2k -0.87% R1k Value -0.52% R1k Growth -0.09% R2k Value -1.28% R2k Growth -0.48% FANG+ -0.07% Semis -0.54% Software -0.34% Biotech +1.03% Regional Banks -2.34% SPX GICS1 Sorted: Cons Staples +0.23% Comm Srvcs +0.04% Tech -0.05% Healthcare -0.11% Utes -0.14% SPX -0.27% Cons Disc -0.3% Fin -0.41% Indu -0.58% Materials -0.68% REITs -0.91% Energy -2.69% |
| USD HY OaS |
| All Sectors -3.1bp
to 298bp All Sectors ex-Energy -3.7bp to 283bp Cons Disc -2.8bp to 237bp Indu -3.5bp to 220bp Tech -3.7bp to 303bp Comm Srvcs -2.6bp to 497bp Materials -5.0bp to 263bp Energy -1.9bp to 289bp Fin Snr -3.2bp to 256bp Fin Sub -6.1bp to 202bp Cons Staples -2.8bp to 280bp Healthcare -3.1bp to 350bp Utes -4.5bp to 221bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 2/13 | 8:30AM | Jan PPI m/m | 0.3 | 0.2 |
| 2/13 | 8:30AM | Jan Core PPI m/m | 0.3 | 0.0 |
| 2/14 | 8:30AM | Jan Import Price m/m | 0.4 | 0.1 |
| 2/14 | 8:30AM | Jan Retail Sales m/m | -0.2 | 0.4 |
| 2/18 | 10AM | Feb Homebuilder Sentiment | 47.0 | 47.0 |
| 2/18 | 4PM | Dec Net TIC Flows | n/a | 159.888 |
| 2/19 | 2PM | Jan 29 FOMC Minutes | n/a | 0.0 |
MORNING INSIGHT
Good morning!
The January CPI report came in hotter than expected, with core CPI rising 0.45% MoM, a notable acceleration from recent months. However, despite the initial market sell-off, equities recovered, signaling investor resilience and skepticism toward the data.
Click HERE for more.
TECHNICAL
- SPX and QQQ remain range-bound despite hotter than expected CPI print.
- Treasury yields made a minor breakout Wednesday, which should prove temporary.
- Within CPI data, Shelter remains trending lower, but Transport Services could escalate.
Click HERE for more.
CRYPTO
Of late we have seen weak flows and a lack of bullish conviction from traders and investors. However, in our view, the coming days could bring a breakout from the recent tight trading range.
Click HERE for more.
First News
Shelter inflation might still be quite a headache for consumers, but for investors, there is some good news related to yesterday’s CPI numbers.
The report appears to have worried some who fear that the Federal Reserve’s war on inflation will continue for longer than they had hoped. As it has for months, shelter in January remained one of the one of the main contributory components to inflation. At 0.37% MoM, shelter accounted for 0.17% CTG (contribution to growth) of Core CPI in January. (This is seen in our Chart of the Day above.)
However, it’s notable that during his semiannual testimony to the Senate on Tuesday, Fed Chair Jerome Powell pointed out that rates are becoming less of a factor in overall housing prices, while insurance premiums are starting to play a bigger part. As we noted recently in a discussion about Los Angeles wildfires, for years climate change has ramped up the risk of natural disasters like hurricanes and wildfires, causing insurance premiums to surge – and often, compelling insurers to exit certain markets altogether. This amplifying effect on insurance costs directly impacts housing inflation, but importantly, it is not materially affected by the Fed’s rate policy.
Looking out over the long term, the Fed chair described this as a “longer-term problem with housing affordability, and that’s going to be something that’s not within our authorities or powers to affect.” In fact, because mortgage lenders typically require homebuyers to obtain insurance coverage, Powell warned senators in attendance that “if you fast-forward 10 or 15 years, there are going to be regions of the country where you can’t get a mortgage.”
In the short term, however, Powell suggested that in his view, housing inflation was “a short-term problem that will go away in the coming years.” He also warned that it is “not obvious” that lower rates would slow housing inflation.
For investors, that is arguably a dovish observation. If the Fed believes rates are having less of an impact on shelter inflation or housing prices, then continued higher readings on the shelter components of inflation metrics could be seen as less likely to cause the Federal Open Market to hesitate in cutting rates.
That might well be immaterial, however. As he previously wrote, Fundstrat Head of Research Tom Lee believes that in the upcoming months, shelter inflation will decline considerably as comparisons from last year become easier. YF
