Market Insights

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Check out our next “State of the Market,” on Monday, 2/24. (Market closed Monday 2/17.)

Sizing Up the Market

• S&P 500 stair-steps upward, finding incrementally higher support
  • 1/13: Holds election day close of 5,783
  • 1/27 & 2/3: Holds 12/27 weekly close of 5,971
  • 2/7 & 2/12: Holds 1/17 weekly high of 6,015
• Index holds 21-day EMA, 50-day MA.
• 2/12 low occurred in second minute of trading
  • Resembles bounces on 1/27 & 2/3
• 50-day MA still inching higher
• S&P 500 weathers bearish news in 2025: DeepSeek, tariffs, higher CPI
  • Recent surveys (consumer sentiment, AAII) may suggest fear already peaked
• Global stocks starting to outperform as U.S. dollar stalls
  • Geopolitical fears potentially easing (see below)
• Intermarket:
  • U.S. dollar index spinning top on 2/12
  • VIX bearish outside day

S&P 500, daily chart, with select patterns and indicators.

News & Views:

• Geopolitical thaw?
  • Zelensky: Ukraine could “swap” land with Russia
  • Hegseth rules out Ukraine membership
  • Putin invites Trump to Moscow, easing diplomatic freeze
  • U.S., Russia mutually release imprisoned nationals
  • German DAX breaks out to new highs with S&P 500 still rangebound
• BYD self-driving success ($10k car w/free self-driving software) follows other Chinese tech “wins”:
  • Xiaomi market-share gains vs AAPL
  • DeepSeek success
• EIA crude oil inventories have risen more than expected for 3 straight weeks.
• Coca-Cola (KO): Product mix boosting volume, margins
• CVS Health (CVS): Turnaround plan supports margins
  • Earnings beat estimates by 28%, revenue by less than 1%
  • Trimming Medicare Advantage to boost profits
• McDonald’s (MCD): Product mix (value meals) boosts global comps/traffic on signs of less geopolitical tension
• Cantor Fitzgerald: Mag 7 vulnerable
• FactSet: Most companies cite tariff risk on earnings calls since Q2 2019
• Marc Chaikin: McClellan Summation A/D Index is potentially bullish
• Citadel CEO Ken Griffin to CNCB: Trump’s “bombastic rhetoric … a huge mistake.”
• TechInsights: China purchases of chipmaking equipment to slow in 2025 after 3 years of growth

Inside the Inflation Report

Year over year changes for January:

• Headline CPI +3% vs +2.9% estimate. Core +3.3% vs +3.1% estimate.
• Food away from home (5.7% of CPI) rose 3.4%, the slowest since June 2020
• Owners’ equivalent rent (26.3% of CPI) rose 4.6%, the slowest since March 2022
  • Note: Hotel costs skewing shelter higher despite rent, OER moderating.
• Medical services (6.7% of CPI) rose 2.6%, the slowest since April 2024
• Used-car prices (2.4% of CPI) rose 1%, the fastest since October 2022
• New-car prices (4.4% of CPI) fell 0.3%, up from from -1.3% in October but still down from 13.2% in April 2022.

Upcoming Events

• Earnings tonight: AMAT ABNB PANW COIN DKNG
• Fri 2/14: Retail sales
  • Earnings: MRNA
• Mon 2/17: Presidents’ Day – Market Closed
• Tue 2/18: NAHB housing index
  • Earnings: BIDU ANET
• Wed 2/19: Housing starts/ building permits, *Fed minutes*
• Thu 2/20: Initial jobless claims, crude-oil inventories
  • Earnings: WMT BABA BILI