(Bloomberg) – The bond market has finished the week with solid profits as soft readings in retail sales bet on the Federal Reserve’s interest rate cuts.
Most of them read from Bloomberg
The rallies at the Treasury have pushed 10-year yields to under 4.5%, with bonds gaining for the fifth consecutive week. This is the longest running time since 2021. Financial markets are fully priced with the first Fed cuts by September. The S&P 500 was hovered near the highest ever high. The dollar reached a fresh low in 2025.
Retail sales in the US were the slump in January for nearly two years, showing a sharp pull by consumers after spending ranges ended in the months ended in 2024. Increase in December.
“The consumer sentiment report shows people are nervous, and today’s weak retail sales numbers confirmed that,” David Russell told Tradestation. “But the resulting slack is good news for the Fed and we’ll be leaning a little more balance towards rate reductions.”
Interactive broker Jose Torres is reopening the doors for potential Fed cuts this summer, with Jose Torres attenuated by the “piping hot” inflation print earlier this week I say there is.
The S&P 500 had little change. The Nasdaq 100 has added 0.4%. The Dow Jones industrial average fell 0.4%. The US market will be closed on Monday due to President’s Day. Meta Platforms Inc. rose in 20 consecutive sessions. Dell Technologies Inc. jumped at the news that is close to Elon Musk’s Xai’s over $5 billion server deal. Intel Corp. fell on Friday, but closed in its best week since 2000.
Treasury yields for 2010 fell to 4.48% from 5 basis points. The Bloomberg Dollar Spot Index fell 0.3%.
“Consumers tried so hard to pull back on spending after a generous holiday season, but when it came to eating, they were still willing to open their pocketbook,” Morgan Stanley Wealth Management said Ellen Zentner. “This suggests that households are confident in the economy despite rising policy uncertainty.”
For Gary Schlossberg of Wells Fargo Investment Institute, evidence of slowing activity is not enough to offset the recent indication that it burns inflation and shifts expectations with early speed reductions by the Fed.
“Is consumers taking a break?” said Brett Kenwell of Etro. “Investors need to be careful not to extract too many meanings from one data point. However, lower retail sales amid increasing or stubbornly high inflation, which could result in US consumers being more likely to be the case. It’s a burden for businesses. It’s premature to call it a trend, but if that trend develops, it’s going to be a troubling sign.”
Fhn Financial’s Compernolle says he is skeptical that the report shows a true inflection point in consumer spending. Bonds combined with “a enthusiastic response” to the producer price index on Thursday moved to “overbuying territory.”
“The positive scenario from today’s data is: The economy is eased and consumer weakness is a blip that doesn’t affect investors’ love for stocks,” says interactive broker Steve Sosnick. I did. “Flipside is an even worse scenario. Both consumers and the government will close their wallets and impact GDP faster than the Fed willingly run.”
According to Michael Hartnett of Bank of America Corp, faster US inflation could be a “blessing of disguise” in financial markets, so President Donald Trump could opt for fewer trade tariffs. there is.
The strategist recommended buying bonds, saying that the Treasury yield in 2010 likely reached around 5%, a multi-year high in January. Yields were trading nearly 4.7% on Friday. Hartnett also repeated his preference for international stocks over US stocks.
“The bond yields have certainly been bounced back this week. The fact that they were able to come back played a major role in yesterday’s strong stock market rally,” Miller Tabak said. Matt Murray said. “But this seemed more related to the issue of inflation than war or tariffs.”
Given the stock market is tied to the range for almost three months, Maley concluded that a meaningful upward breakout in this range is technically highly positive.
An analysis conducted by Goldman Sachs Group Inc. shows that the market has been micro-driven than average since its launch in 2023. Over the past six months, 74% of the typical S&P 500 share returns have been driven by rather unique corporate profits. It averages 58% over the past 20 years than the “macro” factor.
“We hope that the current micro-driven environment will last in 2025,” says Goldman strategist, led by David Kostin.
Among the factors, they said the economic forecast points to a healthy growth environment this year. Continuous development and adoption of artificial intelligence should trigger stock-wide differentiation. Increased policy uncertainty also suggests increased variance.
“The debate over trade, tax, fiscal and other policies represents a potential catalyst for additional reversal diversification,” they noted. “The ‘micro-driven’ market creates opportunities for active managers. ”
Company highlights:
Airbnb Inc. issued a bright forecast for the first three months of 2025.
Applied Materials Inc., the largest manufacturer of chip manufacturing equipment in the United States, has issued a warm revenue forecast for the current period, citing the risk that export controls will put a strain on the business.
Coinbase Global Inc. said revenues on Trump-inspired digital assets more than doubled in the last quarter, earnings increased more than expected.
Dell Technologies Inc. is in the advanced stages of securing more than $5 billion in transactions to provide Elon Musk’s Xai with servers optimized for artificial intelligence.
Draftkings Inc. has raised its sales guidance for this fiscal year, reporting its fourth quarter revenue that beats expectations.
Moderna Inc. recorded quarterly losses as vaccine sales declined, and the company received an unexpected charge for cancelled manufacturing contracts.
Palo Alto Networks Inc. has issued a disappointing revenue outlook for the year despite rivals including Fortinet Inc. and Check Point Software Technologies Ltd.
Roku Inc., the Streaming-Video Platform Company, reported its fourth quarter results that beat expectations.
Tumbled after Soundhound AI Inc., Serbrobotics Inc. and Nano-X Imaging Ltd. filed 13F indicating Chipmaker has left the company’s shares after Nvidia Corp. filed 13F.
Taiwan Semiconductor Manufacturing Co. is considering gaining control of Intel Corp.’s factory at the request of Trump administration officials, and the president will support American manufacturing and maintain US leadership in critical technologies. He says he is trying to do so.
Some of the main market movements:
stock
The S&P 500 had little change as of 4pm in New York.
Nasdaq100 rose 0.4%
Dow Jones’ industrial average fell 0.4%
The MSCI world index has been largely unchanged
Bloomberg 7 Total Return Index rises 0.4%
Russell 2000 indexes have been largely unchanged
currency
Bloomberg Dollar Spot Index fell 0.3%
The euro rose 0.2% to $1.0491
The UK pound rose 0.2% to $1.2586
The Japanese yen rose 0.3% per dollar to 152.32
Cryptocurrency
Bitcoin rose 0.7% to $97,156.73
Ether rose 2.2% to $2,726.16
Bonds
Treasury yields fell by 5 basis points in 2010 to 4.48%
Germany’s 10-year yield increased one base point to 2.43%
UK 10-year yield increased one base point to 4.50%
merchandise
West Texas Intermediate Crude fell 0.8% to $70.72 barrels
Spot Gold has dropped by 1.5% to 2,884.89 oz
This story was created with the support of Bloomberg Automation.
– Supported by John Viljoen, Sagarika Jazingani, Margarita Kirakosian, Julien Ponsus and Diviya Patil.
