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Wall Street Today | Stock Market Rally Derailed by Hot Inflation

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Moomoo Recap US wrote a column · Feb 16 15:52
Wall Street Today | Stock Market Rally Derailed by Hot Inflation
RECAP
Stocks Swing
US stocks swung between gains and losses before ending the week's last trading day lower after the release of another data signaling hotter-than-expected inflation. The latest producer price index fueled concerns that the much-anticipated cuts in interest rates by the US Federal Reserve may come later than the market is pricing in.

The $S&P 500 Index(.SPX.US)$ fell 0.5% while the $Nasdaq Composite Index(.IXIC.US)$ slipped 0.8%. The $Dow Jones Industrial Average(.DJI.US)$ declined 0.4%. Four of the Magnificent Seven slipped, led by $Meta Platforms(META.US)$'s 2% slide and $Alphabet-A(GOOGL.US)$'s 1% loss. $Tesla(TSLA.US)$, which has been on a downward trajectory, managed to end Friday in the green, while $Amazon(AMZN.US)$ barely held on to gains. $NVIDIA(NVDA.US)$ remains the biggest gainer of the pack, rising 1.8% for the day.

Traders are now pricing in a 64% chance that the fed funds rate will remain at its current level when Fed officials meet in May, according to the CME Fedwatch tool. That's almost double the odds seen a week ago, and a huge jump from 2.5% a month ago, the CME data showed.
Source: CME
Source: CME
MACRO
Running Hot
The producer price index rose a seasonally adjusted 0.3% in January, the US Bureau of Labor Statistics said in a news release Friday. That's much faster than the 0.1% gain expected by economists polled by Dow Jones. The bumpy economic data seen this week, including the latest PPI figure, is normal for the economy, San Francisco Fed President Mary Daly said.

The Federal Reserve should resist the temptation of cutting interest rates too quickly, given the risk that inflation could stray from its downward trajectory, thwarting efforts to cool prices, Daly said.
SECTORS
Tensions Return to the Fore
Crude oil futures rose to the highest since November as concerns over geopolitical tensions returned to the fore amid signs of an escalating war in the Middle East that could disrupt the flow of supply. The fighting intensified between Hezbollah in Lebanon and Israel at a time when Iraq and Kazakhstan pledged compliance with their production targets after failing to fully cut output as promised last month, Bloomberg reported.
Wall Street Today | Stock Market Rally Derailed by Hot Inflation
Gold advanced amid signs US consumer prices are running hotter-than-expected, boosting the appeal of the precious metal used as a hedge against inflation.
COMPANIES
Applied Materials Beats
$Applied Materials(AMAT.US)$ shares climbed after the semiconductor company reported adjusted earnings per share for the first quarter that beat the average analyst estimate. First quarter adjusted earnings per share reached $2.13, better than the Bloomberg consensus estimate of $2.03. The company reported net sales of $6.71 billion. While that's down 0.4% from a year ago, the figure is still above the average estimate $6.48 billion from analysts surveyed by Bloomberg.
Coinbase's Swing to Profit
$Coinbase(COIN.US)$ shares climbed after the company posted fourth quarter earnings and revenue late Thursday that beat analysts' estimates. The company reported $1.04 earnings per share, compared with a loss of $2.46 a year ago. Analysts polled by Capital IQ expected $0.01. Revenue for the quarter that ended Dec. 31 was $953.8 million, up from $629.1 million a year earlier. That exceeded the $818.4 million expected by analysts, according to MT Newswires.
Investors Dash for the Exit
$Dash(DASH.CC)$ shares slumped after the company reported a wider-than-expected quarterly losses, overshadowing a beat in sales. The company posted a loss of $(0.39) per share after the bell Thursday, worse than the analyst consensus estimate for a loss of $0.18.
Sabre Gets a Cut
$Sabre(SABR.US)$ shares tumbled to a new record low after analysts cut their price target on the stock. The stock extended yesterday's losses that were spurred by disappointing financial results and outlook. The travel software company forecast first quarter and full year revenue that missed analysts' estimates while reporting lower-than-expected results for the fourth quarter.
- Luzi Ann Santos | moomoo News
Source: Bloomberg, Dow Jones, CNBC, Reuters
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