What Moved The Markets This Week 📈
Rising Rents Push Inflation Higher, OpenAI Unveils New 'Sora' Video Model, Bezos Dumps $6B Of AMZN Shares, Retail Sales Drop Again, Both UK and Japan Enter Recession, and SHOP + ABNB + DDOG Earnings
Sunday Morning Markets
Trading Week 7, covering Monday, Feb 12 through Friday, Feb 16. Your weekly financial markets update, in less than 5 minutes.
The Week In Review ⏪
Inflation data comes in hot
CPI +3.1% YoY (est 2.9%)
Core CPI +3.9% YoY (est 3.7%)
Core PPI +0.6% MoM (est 0.1%)
Retail sales drop 0.8% in January
OpenAI releases ‘Sora’, a text-to-video model
OpenAI developing search engine to compete with Google
Apple working on its own ‘Copilot’ for Xcode
Icahn takes 10% stake in Jetblue
UK + Japan both slip into recession
Layoffs from Cisco, Instacart, and Toast
Earnings from Shopify, Airbnb, and Datadog
US Markets 🇺🇸
Rising rents push US inflation higher with the CPI jumping 3.1% for the year, down from the 3.4% reading in December but above the consensus estimate of 2.9%. Core CPI rose 3.9% from a year ago, also above estimates.
Wholesale prices post largest increase in five months as the PPI rose 0.3% for the month (est 0.1%). The hot inflation data has pushed the odds of a rate cut at the March FOMC meeting to just 10%, down from 63% a month ago.
Retail sales tumbled 0.8% in January, considerably weaker than expected as consumers continue to face headwinds. Sales at building materials and garden stores were especially soft, sliding 4.1% on the year.
Housing starts post sharpest drop since April 2020 as home builders scaled back new projects. The number of new homes being built fell nearly 15% to a 1.33 million annualized pace, well short of Wall Street’s 1.45 million estimate.
Biden aims to cut F-35 jet purchases by 20% as Congress plans to cap the size of the upcoming defense budget. Shares of LMT 0.00%↑ fell 2.6% on the news as Lockheed currently earns 25% of its revenue from the jet program.
Carl Icahn reports a 10% stake in JetBlue Airways, calling the stock undervalued. Icahn will also receive two seats on the company’s board to help enact needed changes. Shares of JBLU 0.00%↑ surged 15%.
Jeff Bezos dumps another $2 billion in Amazon shares according to SEC filings, bringing his total sales to over $6 billion in February alone. The last time Bezos sold shares was in 2021 near the market's peak.
Uber unveils a $7 billion share buyback program after posting its first profitable year since going public. Over the next three years, Uber expects bookings to grow in the high teens and profits in the high 30s to 40%.
Global Markets 🌏
Japan is no longer the world’s third-largest economy after it unexpectedly declined into a recession. GDP fell 0.4% in the fourth quarter after a 3.3% contraction in the third quarter, sharply missing forecasts for 1.4% growth.
The U.K. economy slipped into a recession as GDP shrank by 0.3% in the final three months of the year. All three main sectors of the economy contracted, with declines of 0.2% in services, 1% in production, and 1.3% in construction.
Inflation in the U.K. holds steady at 4%, defying expectations and increasing the odds of future rate cuts from the Bank of England. Core inflation also held at 5.1% for the year, the same reading as in December.
Eurozone industrial production grew unexpectedly, signaling that the recent slump in manufacturing could be coming to an end. Production rose 2.6% during the month following a 0.4% increase in November.
Alexei Navalny, a major critic of Putin, dies in prison where he was serving a 19-year sentence on charges of extremism. The death comes less than a month ahead of presidential elections that are likely to yield Putin another term.
Biden’s relationship with Netanyahu seems to be faltering as the US urges caution with Israel’s plans to invade Rafah. The Biden administration acknowledges waning influence over its closest Middle East ally.
Tech ⚡
OpenAI unveils text-to-video model called Sora which, given a description or still image, can generate 1080p movie-like scenes with multiple characters, different types of motion, and background details.
Bitcoin has rallied over 20% so far in February to over $50,000 as the newly approved Bitcoin ETFs saw net new inflows of roughly 45K BTC worth over $2B this week alone, according to HeyApollo.
Apple readies AI tool to rival Microsoft’s GitHub Copilot as part of the next major version of Xcode. Apple has been testing the tool internally and plans to release it to third-party software makers as early as this year.
OpenAI has been developing a web search service to compete with Google. Based on reports, Microsoft’s Bing would partially power the new search engine. GOOG 0.00%↑ shares fell 5% following the news.
Cisco, Instacart, and Toast announce layoffs this week as companies continue to rightsize their businesses. Cisco plans to cut 5% or 4000 jobs, Instacart to cut 7% or 250 jobs, and Toast to cut 10% or 550 jobs.
Super Bowl 58 was most-watched television show ever with an estimated 123.4 million viewers. CBS Sports said that figure was up 7% from last year’s 115.1 million average viewers, which was also the previous record.
Zuckerberg says the Meta Quest 3 is “the better value” and “the better product, period” when stacked against the Vision Pro. He believes his headset is more comfortable, has a better content library, and is 85% cheaper.
SpaceX files to move incorporation to Texas from Delaware just one week after a Delaware Court rescinded Elon’s 2018 Tesla pay package. Musk has since encouraged other businesses to move out of Delaware.
Earnings Reports 💰
See other breakdowns on our Twitter page.
Weekly Poll 🗳️
Week Ahead 📅
Monday
Markets Closed - Washington's Birthday 🇺🇸
CN - PBOC Loan Prime Rate 🇨🇳
Tuesday
US - CB Leading Economic Index (JAN)🇺🇸
CA - CPI Inflation (JAN)🇨🇦
Earnings Reports: Walmart, Home Depot, Palo Alto Networks💰
Wednesday
US - FOMC Meeting Minutes 🇺🇸
EU - ECB Meeting 🇪🇺
JP - Jibun Services PMI (JAN)🇯🇵
Earnings Reports: Nvidia, Analog Devices, Rivian, Etsy, Lucid, Wingstop, Dutch Bros, GlobalE💰
Thursday
US - Jobless Claims🇺🇸
US - Existing Home Sales (JAN)🇺🇸
US - S&P Composite PMI (FEB)🇺🇸
CA - Retail Sales (JAN)🇨🇦
UK - S&P Composite PMI (FEB)🇬🇧
EU - CPI Inflation (JAN)🇪🇺
EU - HCOB Composite PMI (FEB)🇪🇺
Earnings Reports: Booking, Intuit, Block, MercadoLibre, Nu, Carvana, Wayfair💰
Friday
DE - GDP Growth (Q4)🇩🇪
Earnings Reports: Warner Bros💰
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