Here is what you need to know on Tuesday, February 8:
Yields keep rising, but the VIX keeps falling – sign perhaps that this bear market may becoming endemic. Certainly with the US 10-year yield heading for 2%, growth stocks remain pressured. However, we should note real yields continue to fall as inflation runs on. This should underpin value stocks in our view. The era of cheap money is over, but inflation is here to stay and inflation assets will benefit.
Last Friday's strong employment report from the US certainly has strengthened the recovery view and put stagflation bulls back in their boxes. The global economy looks set to remain strong, and many think the US will outperform the Eurozone once again. US policy is more flexible and reactive. The EU is a slower, more staid political animal with various competing factions and economies. For now, we expect a few more days of relative calm in equity land. That is until we get to Thursday's inflation report. That should liven things up, but we feel the risk reward is to the downside for inflation and upside for equities. Investors have become desensitized to inflation running hot. A figure in line or higher than expected will not generate the same response as a low number.
The dollar is also calm at 1.1420 versus the euro. Oil losing 2% to $89.40, gold is flat at $1,818, and Bitcoin is trading at $43,300.
European markets are flat to slightly lower: EuroStoxx and FTSE are flat, while the Dax is -0.2%.
US futures are lower: S&P -0.25, Dow flat, and NASDAQ -0.4%.
Wall Street News (SPY) (QQQ)
Spotify (SPOT): Bank of America cuts price target. Joe Rogan debate rumbles on.
CF Acquisition Corp VI (CFVI): Rumble offers Joe Rogan $100 million.
Tesla (TSLA): CNBC reports Tesla cut steering components on some cars due to chip shortages.
Tesla (TSLA): FT and WSJ report SEC issued subpoena over Elon Musk tweets.
General Motors (GM) was downgraded by Morgan Stanley.
Peloton (PTON) names new CEO. Earnings missed on top and bottom lines, and outlook was lower than expected.
Harley Davidson (HOG): strong earnings report sees shares up in premarket by 7%.
Warner Music (WMG) up 4% on earnings.
Cenovus Energy (CVE) down 6% on earnings.
Nvidia (NVDA) deal for ARM is off.
Fiserv (FISV) down 6% on earnings.
Pfizer (PFE) down 4% on earnings.
Meta Platforms (FB): Peter Thiel leaving board.
AirBnB (ABNB) downgraded by BTIG.
BP earnings in line, outlook in line. $4 billion buyback in 2022.
DuPont (DD) beats on top and bottom lines.
Apple (AAPL) buys AI Music, according to Bloomberg.
Upgrades and Downgrades
Source: Benzinga Pro
Economic releases
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