Welcome to Yahoo Finance's special coverage of the January consumer price index report. We are getting the numbers and month- over-month inflation 0.2% a little bit more subdued than the 0.3% month overmonth gain that economists had expected. Core CPI month overmonth 0.3% that is a little bit of an acceleration.That's in line with analyst estimates. And then just as we saw the month overmonth coming in a little lower, we see it for year-over-year 2.4%. 4% the headline consumer inflation number year-over-yea ...

This is a this is a good news print, right. We're seeing the the disinflations continuing. So gradually, but you know, so even with January notwithstanding the little bump up like it is um I think there's some really good good signs in here.>> You have to look at the trends not one month. Uh we know that January tends to be highly volatile in terms of economic data, in terms of CPI in particular because that's when your gym membership price uh gets reset, that's when your uh streaming service price gets res ...

Core Viewpoint - The impact of AI on job markets and inflation is significant, leading to a potential disinflationary environment, which may influence the Federal Reserve's monetary policy decisions [2][6][7]. Group 1: Job Market and AI Impact - The Federal Reserve is aware that AI is causing disruptions in the software sector, which may lead to job losses in the near future [2][5]. - The stock market may not react strongly to labor reports due to concerns about future job losses attributed to AI [3][5]. - The software sector, valued at $450 billion, is facing challenges from AI, which could lead to deflationary pressures [6]. Group 2: Inflation and Federal Reserve Policy - Core CPI year-over-year is expected to drop to 2.52%, indicating a return to pre-COVID inflation levels [6]. - The Federal Reserve is anticipated to adopt a dovish stance, with potential rate cuts later in the year due to the disinflationary environment [7][6]. Group 3: Market Dynamics and Sector Rotation - The market is currently experiencing a rotation from technology stocks (MAG 7) to sectors like energy, industrials, and commodities, which are perceived as more resilient [8][11]. - A potential market drawdown of 10-20% could lead to a bullish outlook for non-U.S. markets, as they are less tech-dependent [11][12]. Group 4: Cryptocurrency Market Sentiment - The cryptocurrency market is facing challenges, with investor sentiment negatively impacted by recent price actions and market conditions [12][15]. - The shift in investor focus towards gold, driven by its strong performance, has contributed to a decline in interest in cryptocurrencies [15][16].

Market Overview - The US markets are experiencing a mixed picture with the Dow down over 150 points and the S&P 500 slightly down, while the Nasdaq shows a minor bounce [2][4] - The upcoming week is significant for markets with jobs and inflation data expected, which will be closely monitored by investors [8] Sector Performance - In the S&P 500, consumer discretionary and healthcare sectors are under pressure, while the technology sector is rebounding [5] - Energy is noted as the best-performing group this year, also seeing a bounce [6] Software and Technology Stocks - Software stocks experienced a sharp sell-off recently but showed a strong rebound, indicating they were deeply oversold [10] - Companies like Oracle and Microsoft are mentioned positively, while others like Adobe and ServiceNow are still under pressure [6][7] Economic Indicators - The market is focused on the January jobs report and inflation data, with expectations of a stabilizing labor market [21][22] - Estimates suggest AI capital expenditure could add approximately 1.5% to GDP growth by 2026, indicating potential economic benefits from AI investments [15] Healthcare Industry - The healthcare sector has faced a $100 billion selloff due to new proposals from the Trump administration aimed at reducing federal funding for health insurers [108] - The expiration of subsidies for ACA plans is expected to lead to an average increase of about $1,000 per year for those purchasing insurance through exchanges, with over a million people already leaving these exchanges [111][112] Women's Sports Investment - Women's sports are seen as a significant financial opportunity, with institutional investment increasing and a focus on building sustainable business models [41][47] - The ecosystem around women's sports is being developed to ensure profitability and support for athletes, with investments in various leagues and related businesses [50][53]

Core Insights - Bitcoin surged 6% as U.S. planned layoffs tripled in January, raising hopes for Federal Reserve rate cuts to support the economy and risk assets [1][4] Group 1: Layoff Data - U.S. companies announced plans to cut 108,435 jobs in January, a 205% increase from the previous month and the highest level in 17 years [2] - Year-over-year, announced job cuts rose by 118%, indicating a significant weakening in the labor market [2] - Most layoffs are planned for the end of 2025, reflecting employer pessimism about 2026 [2] Group 2: Economic Indicators - Private reports are signaling potential cracks in the labor market, contrasting with the Bureau of Labor Statistics' resilient payrolls report [3] - Real-time inflation data from Truflation shows inflation dropping below 1%, while official CPI remains above the Fed's 2% target, suggesting weakening growth [4] Group 3: Federal Reserve Rate Cuts - Expectations for Federal Reserve rate cuts are divided, with some banks predicting at least two 25-basis-point cuts this year [5] - JPMorgan Chase expects rates to remain unchanged through 2026, with increases anticipated in 2027 [5] - An economist predicts a potential 100 basis points cut before the November midterm elections [5] Group 4: Bitcoin Price Outlook - Bitcoin is recovering from extreme oversold conditions, bouncing from support levels of $60,000-$62,000 [6] - Critical resistance levels are identified at $75,000-$80,000, which Bitcoin must overcome to regain upward momentum [6] - The Relative Strength Index (RSI) at 25.14 indicates a bounce from oversold territory, but overall momentum remains bearish [7]

Earnings Reports - Microsoft and Meta both beat expectations, with Meta increasing its CapEx spending to $17 billion, a 41% growth from last year [4] - Microsoft stock fell 10% post-earnings, while Meta's stock rose 10%, indicating differing market reactions despite similar news [5] - Meta's average revenue per user reached $16.56, up 16% year-over-year, marking 10 consecutive quarters of double-digit growth [9] - Microsoft continues to see solid growth in its cloud segment, but concerns arise about reaching a peak [10] - Tesla's earnings report showed declines in deliveries and production, with the stock initially rising but then fading [12] - Apple reported record sales with iPhone revenue exceeding $85 billion and services revenue surpassing $30 billion, but the stock declined due to perceived lack of investment in AI [16] Health Insurance Sector - UnitedHealth's stock dropped 20% after projecting a revenue decline in 2026, the first such decline in decades, influenced by proposed minimal increases in payment rates [18] - Other health insurance stocks also fell, with Humana down 21%, CVS down 14%, and Molina Healthcare down 8% [19] Travel and Leisure Industry - Royal Caribbean's stock rose 19% following stronger-than-expected guidance, indicating double-digit growth in revenue and earnings [21] - Southwest Airlines also saw a 19% increase in stock price, projecting a 300% rise in EPS for 2026 compared to 2025 [22] - The performance of these companies suggests underlying demand in the travel and leisure sector [23] Upcoming Earnings - Anticipation builds for Amazon and Alphabet's earnings reports, with a focus on Amazon's AWS performance and Alphabet's investment strategies in AI [24][27] - Other notable companies reporting include Uber, Qualcomm, and several pharmaceutical firms [28] Macro Economic Insights - The upcoming jobs data is expected to be significant, with previous reports showing only 50,000 jobs added, raising concerns about potential negative revisions [36] - Consumer confidence remains low, attributed to persistent inflation and rising prices affecting daily life [39][40] - The political landscape may further influence consumer perceptions of the economy, especially with midterm elections approaching [43]

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分组1: Federal Reserve and Economic Outlook - The Federal Reserve is expected to hold interest rates steady this week, with no new projections anticipated [37][38] - There is significant interest in the press conference for insights on the Fed's future rate decisions and potential dissents among policymakers [40][41] - The current economic environment is described as being in a "plausible range of neutral," indicating a balanced approach to monetary policy [39] 分组2: Earnings Reports and Market Reactions - Major tech companies including Microsoft, Meta, Tesla, and Apple are set to report earnings this week, with a focus on AI impacts and spending plans [19][30][26] - Microsoft is expected to report a revenue of approximately $25.1 billion for Q4, with analysts looking for insights on Azure growth and capacity constraints [32][23] - Meta is anticipated to provide updates on its spending plans and the performance of its Reality Labs division, which has seen layoffs and a shift in focus [28][29] 分组3: Precious Metals Market - Gold prices have surged above $5,000 per ounce for the first time, indicating potential market concerns and geopolitical tensions [42][44] - The silver market is also experiencing significant movements, suggesting a shift in inflation expectations from disinflation to potential hyperinflation [45] - The decline of the dollar is contributing to the rise in precious metals, raising questions about future economic stability and purchasing power [46][48] 分组4: Impact of Winter Storm on Industries - A severe winter storm has affected 17 states, leading to widespread power outages and significant disruptions in travel, with approximately 823,000 people without power and over 10,000 flight cancellations [9][10] - Retailers like Home Depot and Lowe's are expected to see increased demand for supplies due to the storm, while delivery services like DoorDash have paused operations in affected areas [13][16] - The storm's impact on consumer behavior and supply chains may influence Q1 earnings for companies in the retail and utility sectors [14][11]

Summary of the January FOMC Preview Conference Call Industry Overview - The conference call focuses on the Federal Reserve's monetary policy, specifically the expectations surrounding the January FOMC meeting and its implications for the U.S. economy and financial markets. Key Expectations - The Federal Reserve is expected to maintain the federal funds rate target range at **3.5-3.75%** during the January meeting, indicating a "dovish hold" [5][8][7] - The Fed has initiated bill purchases to keep reserve balances at "ample" levels, a policy expected to continue without additional changes in January [5][8] - The Committee is anticipated to upgrade its assessment of economic growth from "moderate" to "solid," reflecting improved consumer spending momentum [5][9] - The statement is likely to remove references to increased downside risks to employment, suggesting a more favorable outlook for the labor market [5][12] Communication Strategy - A key focus will be on how Chair Powell communicates the pause in rate cuts, with expectations leaning towards a "dovish hold" that emphasizes the potential for future rate reductions if inflation pressures ease [5][24][23] - There is a possibility of a "hawkish hold" if the committee signals a more durable pause, which would indicate the end of the rate-cutting cycle [5][24][25] Market Implications - Rates strategists recommend investors maintain a neutral position in U.S. Treasury duration and curve, while favoring long positions in 2-year UST SOFR swap spreads [5][5] - FX strategists note that the case for U.S. dollar (USD) weakness is less pronounced but remains, with a hawkish FOMC likely to weigh on the Australian dollar (AUD) more than other currencies [5][5] Economic Indicators - Recent stabilization in the labor market and solid economic activity data are seen as justifications for the Fed's decision to pause rate cuts [7][23] - The unemployment rate is projected to remain low, with a slight decline to **4.375%** noted, indicating limited slack in the labor market [23][23] - Inflation data has shown muted signals, with concerns shifting towards inflation persistence rather than further increases [11][11] Forward Guidance - The Fed is expected to maintain language regarding the "extent and timing of additional adjustments" to the target range, signaling an easing bias [5][13] - The anticipated changes in the FOMC statement reflect a shift towards a more optimistic economic outlook, while still acknowledging divisions within the committee regarding the appropriate policy path [5][27][29] Additional Considerations - The Fed's recent speeches indicate a narrowing of divisions among committee members, suggesting a more unified outlook on economic conditions [27][28] - Powell is likely to address various topics during the press conference, including productivity gains, AI's impact on the labor market, and risks to Fed independence [30][31] Conclusion - The upcoming FOMC meeting is poised to reflect a cautious yet optimistic stance on the U.S. economy, with the Fed maintaining a "dovish hold" while preparing for potential future rate cuts depending on inflation trends and labor market conditions [5][7][24]

Investors are looking past headline inflation noise to drive a significant market shift. According to Professor Jeremy Siegel, the current rotation toward small-cap and value stocks is sustainable, supported by underlying economic resilience and the clear trajectory of Federal Reserve policy.Broadening MarketProfessor Siegel observes a notable rotation away from the largest growth names as earnings season begins, suggesting a healthier market advance is underway.Large-cap growth stocks have recently pulled ...