Daily Live Updates for Market Investors on a Daily Basis: February 12

For the first time, the S&P 500 Index surpassed the 5,000-point barrier to achieve a huge milestone in market valuation. US stock futures held steady on Monday as investors look forward to another set of key economic releases and earnings reports this week. On Friday, the S&P 500 rose 0.57% and closed above the 5,000 level for the first time, while the Nasdaq Composite jumped 1.25%.

Meanwhile, the Dow fell 0.14%. Those moves came as BLS data showed that CPI increased 0.2% month-over-month in December, less than 0.3% initially reported. All three benchmarks ended the week higher, led by a rally in the technology, consumer discretionary and communication services sectors.

Investors now look ahead to US inflation data this week, as well as retail sales and consumer confidence figures. On the corporate front, earnings are set to come from Shopify, DraftKings, Arista Networks, Coinbase and Datadog, among others.

“This achievement, however, was characterized by a narrow advance, indicating that the rally was led by a select group of stocks rather than a broad-based participation. The disparity between the market-weighted and equally weighted versions of the index highlighted this concentration of gains. The market’s momentum was further influenced by a successful $42 billion U.S. Treasury note auction, which alleviated some concerns about rising borrowing costs potentially impacting the Federal Reserve’s ability to adjust interest rates to stimulate the economy,” says Bas Kooijman, the CEO and Asset Manager of DHF Capital S.A.

The yield on the US 10-year Treasury note hovered around 4.15%, little changed from last week’s levels, with traders eagerly awaiting the US CPI report due Tuesday. Inflation is expected to continue to slow, reinforcing bets the Fed is set to cut interest rates this year. Investors have mostly given up on a March rate cut, with the odds currently standing around 17%, while a May easing stands around 90%. Meanwhile, market participants are also awaiting appearances by various Fed officials, hoping for insights into the timing of the Fed’s monetary easing.

The dollar index was subdued around 104 on Monday as investors cautiously awaited US consumer inflation data on Tuesday for clues on the potential trajectory of interest rates. On Friday, the greenback came under pressure as revised US figures revealed a smaller increase in the CPI for December. According to the BLS, the CPI rose by 0.2% month-over-month, slightly lower than the initial report of 0.3%. However, the core CPI remained unchanged at 0.3%. These figures confirmed a disinflationary trend in the past year and bolstered dovish bets on Federal Reserve monetary policy. Markets still see a small chance for a Fed rate cut in March, but are pricing in a move in May.

Sources: Microsoft Start

Financial Express