Indices: AI-Driven Selloff, Eyes on Inflation Data Next
– U.S. equity index futures are steady after a sharp risk-off session driven by AI disruption concerns, with losses for the (-1.6% to 6,832), (-2% to 24,687), (-1.3% to 49,451), and (-2% to 2,615) with the tech sector suffering most and only defensive sectors avoiding a red finish; Treasury yields moved lower across the curve and save for the shorter end undoing Wednesday’s gains with weaker housing data (see Data below) released yesterday, safety sought by investors due to the risk-off session, and a strong auction; market pricing (CME’s FedWatch) sticks to June and September (via majority) for 25bp out of the Fed this year but tilts back closer to a coin toss on a third in December
Stocks: Tech and AI-Exposed Under Serious Pressure
– Red session for most within the semiconductor sphere, including the heaviest Nvidia (NASDAQ:) (-1.6%), and (-3.6%) and Intel (NASDAQ:) (-3.8%) by larger percentages, but Micron (NASDAQ:) (+0.9%) avoided a red finish and so too other memory stocks like SanDisk (NASDAQ:) (+5.2%) and Seagate (NASDAQ:) (+5.9%)
– Apple (NASDAQ:) shares drop 5% suffering its worst day since April after unconfirmed report regarding Siri upgrade delays and FTC scrutiny of Apple News
– Financial stocks under pressure again with AI seen hurting wealth management business: JPMorgan Chase (-2.6%), Citi (-5.3%), H
– Software and AI-exposed tech still under pressure: Palantir Technologies (-4.8%), Autodesk
– Meme stock movers: Beyond Meat (-2.5%), GoPro (-8%), Ope
– Most crypto stocks track cryptocurrencies lower: Coinbase (-8%), MicroSt
– Earnings:
o Applied Materials: strong quarterly performance and provides a strong outlook; shares surge 13.3% in extended trading
o Rivian Automotive: smaller loss than expected and beats on revenue, and expects a significant increase in deliveries this year; shares jump 14.6%
o Pinterest: slight miss on revenue and provides weak guidance as CEO says they’ve absorbed “an exogenous shock this year”; shares tank 18.1% in extended trading
o Instacart: misses on earnings but beats on revenue and guidance; shares jump about 15% in extended trading
o Airbnb: misses on earnings but beats on revenue and provides an upbeat guidance; shares up 4.4% in extended trading
o Coinbase: revenue drops more than 20% and suffers a net loss; shares closed 7.9% lower before climbing 0.9% in extended trading
o Crocs: provides upbeat guidance; shares surge 19%
Commodities:
– partially rebounds to get back closer to $5K after the sharp pullback that briefly saw it go beneath $4.9K, with suffering a far larger percentage drop down over 9% with a lack of a real recovery as it fails to go much beyond $77
– (WTI) slid 3.5% to break beneath $63; President Trump signals a diplomatic approach on talks, worries rise over the economy with risk-off related moves in the financial markets, and IEA sticking to its forecast for a sizable surplus this year (+3.73m bpd) as well as lowering global demand
FX/Central Banks/Crypto:
– Another red day for even as it gets back above $66K this morning with Ethersticking below $2K, with technicals tested and the fundamentals hurting when negative and failing to lift it properly on days when updates are positive
– remains in the 96s with oscillatory action ahead of today’s release
– Federal Reserve’s Miran that some of the concerns he had on the labor market is a little less than before and sees a range of policies increasing economic growth in a non-inflationary way
– European Central Bank’s Makhlouf that next move could be a rate cut or rate hike
– Bank of Japan’s Tamura feels recent inflation in Japan is becoming sticky and reiterates that they’ll keep raising rates if outlook is met
Capital.com Client Sentiment: Long Bias Up in Indices and Commodities
– Indices: Pullback sees long bias jump across the board nearing extreme buy in the S&P (76% from 72% yesterday) and jumping back into heavy buy territory in the Dow (74%); elsewhere moves from moderate to heavy long in the (67% from 56%) and (67% from 57%), and back in extreme buy in the ASX (81% from 77%)
– Commodities: Fall in gold takes sentiment back into extreme long territory (81% from 77%) as fresh shorts get out and some longs initiate, similar story in WTI (79% from 70%) and pushes further extreme in silver (87% from 83%)
– FX: Shifts to the middle in (from a slight sell 51%) and remains near the middle in (slight buy 51%) and (slight buy 54%)
Data:
– U.S. come in at 227K, slightly above the 222K forecast with worse than expected as well breaching 1.86m; for January plummet 8.4% to 3.91m m/m far worse than expected
– UK preliminary Q4 0.1% shy of 0.2% expectations; m/m production in December suffers contraction
– China new home prices down 0.4% m/m in January taking the y/y print to -3.1% from -2.7% in December
Today:
– U.S. CPI (5:30 Dubai time; 0.3% m/m growth expected, y/y headline and seen at 2.5%), weekly rig count data out of Baker Hughes (10pm)
o Earnings from Moderna and others
– In Europe, EZ preliminary GDP, trade (2pm)
o Earnings from Safran and others
