/ February 13
-
Thursday:
PPI MoM (0.2% exp.)
Initial Jobless Claims (215K exp.)
---
Friday:
Retail Sales MoM (0% exp.) -
Thursday:
Datadog DDOG
Moody's MCO
Roku ROKU
Airbnb ABNB
Applied Materials AMAT
DraftKings DKNG
GoDaddy GDDY
Palo Alto Networks PANW
---
Friday:
AMC Networks AMCX
Daily Briefing
*The stock market put in a mixed performance with a negative bias under the surface; the underlying selling pressure occurred following a hotter-than-expected January Consumer Price Index (CPI) report, which sent Treasury yields sharply higher;
*Total CPI was up 3.0% year-over-year, versus 2.9% in December and 2.9% expected; core CPI was up 3.3% year-over-year, versus 3.2% in December and 3.1% expected;
*SPY closed -0.32% lower after recovering from the session’s worst levels; the market continues to consolidate and did not break any important level during yesterday’s decline; so far, this whole period is nothing but a drawn out sideways trade that serves to “digest” the unusual gains that occured in 2024; resistance lies at $616, while support stands at $598 (50-DMA);
*The MACD signal has crossed over to the negative side, suggesting that selling pressure is here to stay in the next period;
*The negative CPI surprise occured due to several short-term factors which should dissipate in the coming months; the energy price increase (3-mo lag) doesn't reflect the recent drop; food prices (eggs) will moderate as the avian flu problem is resolved; the biggest part of the increase in inflation was factors outside of Healthcare and Housing, which declined;
*Nevertheless, we need to acknowledge that, for now, the Fed won’t be in any hurry to cut rates;
*A buy-the-dip mentality was evident from an options market perspective as well; SPY recorded 71% short term bullish volume (calls bought + puts sold), and market makers acted in such a way as to reduce volatility; Apple (AAPL, +1.8%) and Meta Platforms (META, +0.8%) were integral in the turnaround action after being down as much as -0.8% and -1.0%, respectively;
*Curiously, one of the main S&P 500 constituent sectors — Tech (XLK) — did not enjoy the same flows in the medium and short term;
*Other stocks that went against the downside grain included DoorDash (DASH, +4.0%), Gilead Sciences (GILD, +7.5%), and Confluent (CFLT, +25.1%), which hit 52-week highs after reporting earnings;
*Still, most major ETFs remain in “reduced volatility” mode, with dealers maintaining positive gamma positions and suppressing volatility (buying dips, selling rallies);
*The 10-yr yield, which is most sensitive to changes in inflation, was at 4.53% ahead of the CPI release before settling at 4.64%; the 2-yr yield settled eight basis points higher at 4.37%;
*TLT tumbled -1.36%, significantly below our designated Stop Level ($89); Enterprise is still holding bond positions, leading us to believe that the dip in treasuries is temporary;