Canadian retail sales are on track to rebound to start the year after barely expanding in the fourth quarter https://t.co/cmo9zLElPt ...

Subscription Services - Spotify has increased its prices again, which is positively impacting its financials, similar to trends seen with Netflix and Disney Plus [1][7] - The long-term strategy for subscription services may involve gradual price increases as companies leverage their market position [1][5] - Spotify's gross margin reached a record 33.1%, with operating income rising 47% year over year, indicating a shift towards profitability and intelligent monetization strategies [7][8] Market Dynamics - The pricing power of subscription services may be limited, as consumers have alternatives like Google and Apple, and excessive price hikes could lead to subscription fatigue [3][5] - The transition of music streaming from a luxury to an essential service suggests that consumers are willing to pay marginally more for quality content [7][8] - The disparity in consumer spending power is evident, with the top 20% of earners accounting for about 60% of personal outlays, while lower-income households are more focused on essentials [14][15] AI Disruption and Investment Sentiment - Concerns about AI disruption are influencing market reactions, particularly for companies like Unity, which reported strong numbers but faced a significant stock drop due to weak guidance [23][24] - The market's reaction to Unity's guidance reflects heightened fears of AI-driven disruption, despite the company's revenue growth and cash position [24][25] - The overall sentiment in the market is leaning towards risk aversion, particularly for high-growth stocks, as investors react to potential threats from AI [26]

Economic Indicators - The headline month-over-month CPI increased by 0.2%, which is 0.1% lower than expected, while the year-over-year headline CPI is at 2.4%, down 0.3% from last month and 0.1% lower than the forecast of 2.5% [2][3] - Core month-over-month CPI rose by 0.3%, aligning with expectations, and the year-over-year core CPI is at 2.5%, which is 0.1% lower than last month [2][3] Energy Sector Impact - Energy prices decreased by 1.5%, with energy commodities down 3.3% and gasoline prices down 3.2% over the last 12 months, reflecting a 7% drop in gasoline prices [3][4] - Fuel oil prices fell by 5.7%, while new vehicle prices increased by 0.1%, and used cars and trucks saw a decline of 1.8% [3] Transportation and Shelter - Airfares increased by 6.12% in the month, while shelter costs rose by 0.2%, with owner's equivalent rent also up by 0.2% [3][4] - Transportation services contributed positively to the CPI report, increasing by 1.4% [4] Market Reactions - Following the CPI report, the market initially showed a decline of 0.3% in futures but later rebounded to an increase of 0.125% due to softer-than-expected inflation numbers [5] - The 10-year yield decreased to 4.09%, indicating a shift in market sentiment [6] Software Sector Performance - The software sector is experiencing significant pressure, with major companies like Microsoft and Palantir facing challenges [7] - Despite the macroeconomic positivity, the microeconomic outlook for the software sector remains uncertain [9] Upcoming Economic Data - Key economic data expected next week includes durable goods, GDP, and personal income and outlays, which will provide further insights into the economic landscape [11]

A boom in Chinese tourism is helping offset gloomy retail sales https://t.co/BaOq1xyhyl ...

Economic Indicators - The latest jobs report showed 130,000 non-farm payrolls added, significantly better than expectations, with a minor revision of last month's payrolls from 50,000 to 48,000 [1] - The unemployment rate decreased to 4.3%, down from 4.6%, indicating a positive trend in the labor market despite an increase in labor force participation [2] - Private payrolls increased by 172,000, while manufacturing payrolls saw a slight increase of 5,000 after previous declines [2] Wage and Inflation Data - Hourly average earnings increased by 4% month-over-month and 3.7% year-over-year, which is a tenth lower than the previous month but higher than expectations [3] - The wage growth data suggests inflationary pressures may persist, impacting interest rate expectations [3] Interest Rate Outlook - The strong jobs report has led to a firming of bonds and a potential delay in anticipated Federal Reserve rate cuts, with the 10-year yield rising as a result [4][7] - There is a consensus that rate cuts may not occur in the next two meetings, as the labor market shows strength [8] Housing Market - Mortgage applications remained unchanged at a 30-year fixed rate of 6.21%, with overall housing market activity still sluggish [8][9] - Recent data indicates a decline in home purchases by 2.4%, while refinances increased by 1.2%, suggesting ongoing challenges in the housing sector [9][10]

Economic Outlook - The current economic indicators suggest a largely positive outlook, with durable goods showing strength and manufacturing output on an upward trend, indicating complementary hiring is a welcome sign for the economy [2][4] - Consumption is projected to grow at 2.3% in the fourth quarter, despite weak retail sales, which is still considered a solid number [4] Job Market Analysis - The quality of jobs being created appears to be positive, as indicated by average hourly earnings, suggesting that there are quality jobs across various sectors [4] - The narrowness of job gains and economic growth remains a concern, with spending by upper-income consumers and AI-related business spending being key factors [6] Sector Performance - Certain sectors, such as health and social assistance and private education, have shown significant job gains, which are somewhat independent of economic cycles [5] - There is an expectation of broader economic recovery and stabilization in the labor market, which could lead to a decrease in inflation and support purchasing power across the economy [6][7]

Core Insights - Consumer spending growth has shown signs of slowing down, with recent data indicating that retail sales were flat in December, falling short of expectations after several months of robust growth [2][9] - The labor market is weakening, with fewer jobs being added and layoffs increasing, which could significantly impact consumer spending in 2026 [5][10] - The wealth effect, driven by higher stock prices and increasing housing wealth, has supported consumer spending, but a potential slowdown in the stock market may lead to reduced spending [6][7] Economic Impact - Consumer spending constitutes about two-thirds of the U.S. economy, meaning even slight slowdowns can have a substantial effect on overall economic activity [3][4] - The recent flat retail sales data suggests that the holiday shopping season was less favorable for some retailers, which could have implications for corporate profits and stock prices [8][9] - Economists have noted that a combination of slower real disposable personal income growth, a softening labor market, and declining saving rates may be diminishing consumers' willingness and ability to spend [10]

Group 1 - The stock market is poised for a positive opening as investors anticipate a delayed jobs report that may influence the Federal Reserve's interest rate cuts in 2026 [1] - Futures for the Dow Jones Industrial Average increased by 81 points, or 0.2%, while S&P 500 and Nasdaq 100 futures both rose by 0.1% [1] - The Dow achieved a record close for the third consecutive session, although other major indexes ended lower due to disappointing retail sales data [1]

The countdown is on. Everything you need to get the edge at the end of the market day. Live from Studio two at Bloomberg headquarters in New York, I'm Katie Greenfield and standing next to me.Hello, Scarlet Fu. Hello. It's an it it's not even an ETF like you did, not even a monday.All right. We're kicking you off to the closing bell here in the US on this Tuesday with stocks mixed Right now, you do have the S&P 500 lower by a 10th of 1%, but we're still pretty much near record highs in terms of the gainers ...

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