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NEWS
Inflation Is Back In Play

Stocks sank and rates cranked following a hotter-than-expected inflation print. The continued macro headwinds keep the major indexes in a range, while earnings and company news put individual stocks in play day after day. 👀 

Today's issue covers why January’s CPI print sent rates higher, software stocks’ breakout retests, Robinhood and Reddit results, and more! 📰

Here’s the S&P 500 heatmap. 1 of 11 sectors closed green, with communication services (+0.11%) leading and energy (-2.41%) lagging.

And here are the closing prices: 

EARNINGS
Inflation Inches Up, Raising Market Fears 😨 

Month-to-month inflation readings were put aside as an investor focus during 2024, as fears of labor market weakness and a slowing economy took center stage. However, we’ve discussed over the last several months that the job market and economy have remained resilient, halting inflation’s downward progress in its path.

January’s consumer price index (CPI) confirmed that fear, accelerating by 0.5% MoM and 3% YoY, topping estimates. Core CPI rose 0.4% MoM and 3.3% YoY.

Shelter costs remain a sticky situation, this time with “lodging away from home” prices rising 1.4% and driving a 0.4% increase in overall shelter inflation. Used vehicle prices, insurance, and food prices contributed to this month’s rise. 🔺 

The news sent rates higher, stocks lower, and pushed Fed Fund Futures’ expectations for the first rate cut out even further…with market participants targeting September. Whether that expectation is correct will be seen over time, but inflation has clearly returned to the forefront of investors’ attention. 😢 

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