(Bloomberg) – The bond market ended a week with solid earnings as a soft reading on retail sales regenerated bets on federal reserve cuts.
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Rally pushed in treasures of the product 10 years under 4.5%, with the bond indicating its fifth straight week of earnings-the longest run since 2021. Money markets are back to full pricing in a first-fed reduction by September . The S&P 500 was always hovering near its highlights. The fresh low dollar hit for 2025.
US retail sales in January fell by the largest in nearly two years, indicating a sudden withdrawal by consumers after spree expenditure during the closing months of 2024. The value of retail purchases, unmodified for inflation, decreased 0.9 % after 0.7 reviewed up 0.7 % win in December.
“The consumer sentiment report showed that people were getting nervous and confirmed a weak retail sales number today,” said David Russell in Tradestation. “However, the resulting loose is good news for the Fed and tilting the balance slightly more towards rate cuts.”
Interactive brokers, Jose Torres says the weak usage report reopened the door to a possible reduction fed this summer, a hope that was damped by a “hot pipes” inflation print earlier this week.
The S&P 500 was changed. The NASDAQ added 100 0.4%. Dow Jones's industrial average fell 0.4%. US markets will be closed on Monday for the President's Day. Meta Platforms Inc. rose for 20th consecutive session. Dell Technologies Inc. jumped. On news that it is close to a server deal over $ 5 billion for Elon Musk's Xai. Intel Corp. fell on Friday, but closed with his best week since 2000.
The product on 10 -year treasures fell five base points to 4.48%. Bloomberg dollar spot index fell 0.3%.
“Consumers pulled back hard on spending after a generous holiday season, but were still ready to open their pocket books when he came out,” said Ellen Zentner at Morgan Stanley Wealth Management. “This suggests that homes remain confident in the economy even as policy uncertainties arise.”
For Gary Schlossberg at the Wells Fargo Investment Institute, evidence of a slowdown activity is not enough to compensate for recent signs of solid inflation and move back expectations to an early rate cut by the Fed.
“Do consumers take a break?” said Bret Kenwell in Etoro. “Investors should be careful not to remove the meaning of one data point. However, weaker retail sales in the midst of increasing or stubborn inflation is a burden for US consumers and companies. It's too early to call it a trend, but if that trend was developing, it would be a troubled sign. “
Will Compernolle in Financial FHN says it is skeptical that the report is a sign of a real influx point when spending users. Paired with a “invasive response” to the Producer Price Index on Thursday, bonds have moved to “territory of -remembrance,” he said.
“The positive scenario of data today is this: rates are easy as the economy moderates and consumer weakness is a blip that does not affect investor's love relationship with stocks,” said Steve Sosnick at Interactive Brokers. “The side of the flips is a much worse scenario: both user and government slamming their wallets closed, affecting GDP faster than the Fed is ready or can operate.”
Faster inflation in the US could be a “blessing in disguise” for financial markets because it will force President Donald Trump to choose smaller trade tariffs, according to Michael Hartnett of Bank of America Corp.
The strategist recommended bonds, saying that the Treasury's 30 year product is likely to reach a multi-year climax of about 5% in January. The product was trading near 4.7% on Friday. Hartnett also repeated his fondness for international equity over US stocks.
“Bond products have certainly bounced around this week, and the fact that they have been able to come back down has played a big part in yesterday's strong rally in the stock market,” said Matt Maley in Miller Tabak. “However, this seemed to have more to do with the inflation issue than with the war or with tariffs.”
Given that the stock market has been bound for a range for nearly three months now, any meaningful cut -up of this range will be quite positive on a technical basis, Maley concluded.
An analysis conducted by Goldman Sachs Group Inc. shows that the market has been driven more micro than average since the beginning of 2023. In the past six months, 74% of the typical S&P 500 earnings have been driven by company-specific rather than factors “Macro” against an average of 58% over the past two decades.
“We expect the current micro-drive environment to continue in 2025,” said Goldman strategists led by David Kostin.
Among the factors, they said that economic forecasts highlight a healthy growth environment this year; The development and adoption of continuous artificial intelligence should create discrimination across stocks; High policy uncertainty also suggests a higher dispersion.
“Debates about trade, tax, fiscal and other policies represent potential catalysts for additional return dispersion,” noted. “Micro-driving market creates an opportunity for executive managers.”
Corporate Highlights:
Airbnb announced Inc.
Applied of Inc. materials, the manufacturer of the largest US chip production equipment, announced a lukewarm revenue forecast for the current period, noting the risk of export controls breaking its business.
Coinbase Global Inc. said that revenue had more than doubled and increased profit more than the forecast during a rally inspired by Trump last quarter in digital assets.
Dell Technologies Inc. In advanced stages of securing a deal worth more than $ 5 billion to provide servers to Xai Elon Musk optimized for artificial intelligence work.
Inc. draftkings reported A fourth quarter earnings beat expectations and raised his sales guide for the current year.
Moderna recorded Inc. A quarterly loss as vaccine sales weakened and the company had an unexpected pay for a canceled manufacturing contract.
Palo Alto Networks announced Inc. Disappointing earnings forecast for the current quarter, despite competitors including Fortinet Inc. A Check Point Software Technologies Ltd. Post strong results.
Roku Inc., the streaming-video platform company, reported the results of a fourth quarter that beat expectations.
Soundhound fell AI Inc., Serve Robotics Inc. A Nano-X Imaging Ltd. After Nvidia Corp. Filed 13f indicating that the chip maker has left her poles in the companies.
Taiwan Semiconductor Manufacturing Co. Consider taking a control stake in Intel Corp. factories. At the request of Trump's administration officials, someone who is familiar with the matter said, as the President seeks to promote American manufacturing and maintain US leadership in critical technologies.
Some of the main movements in markets:
Stock
The S&P 500 was changed from 4 pm New York
The NASDAQ rose 100 0.4%
Dow Jones's industrial average fell 0.4%
Large MSCI World Index was changed
Bloomberg magnificent 7 Return Index rose 0.4%
Russell 2000 index had not changed big
Cash
Bloomberg dollar spot index fell 0.3%
The euro rose 0.2% to $ 1.0491
The British pound rose 0.2% to $ 1.2586
Yen Japan rose 0.3% to 152.32 per dollar
Cryptocurrencies
Bitcoin rose 0.7% to $ 97,156.73
Ether rose 2.2% to $ 2,726.16
Bond
Product on 10 years treasures decreased five base points to 4.48%
Germany's 10 -year product developed one base point to 2.43%
Britain's 10 -year product developed one base point to 4.50%
Goods
Texas western intermediate crude fell 0.8% to $ 70.72 per barrel
Gold Spot Falled 1.5% to $ 2,884.89 per ounce
This story was produced with the help of Bloomberg Automation.
-With help from John Viljoen, Sagarika Jaisinghani, Margaryta Kirakosian, Julien Ponthus and Divya Patil.
