Westpac says US resilience limits scope for further Fed easing.Summary:US growth remains resilient, with activity tracking above trend despite uncertainty.Labour market stable, unemployment steady around 4.3% and wage growth firm. Household balance sheets strong, wealth at record highs supporting consumption. Inflation risks persist, particularly in core services, complicating Fed easing. Westpac delays final rate cut call to June 2026, but sees risk the Fed stays on hold.Westpac argues the US economy continues to display notable resilience, with little evidence that growth is meaningfully slowing despite elevated uncertainty and political disruption.The bank notes that activity remained firm through the turn of the year, with the Atlanta Fed’s GDPNow tracker indicating output growth stayed above trend even during the longest federal government shutdown on record. After five years of sustained outperformance, Westpac expects growth to moderate toward trend in 2026, but sees little risk of a sustained downturn in momentum.Labour market conditions, in its assessment, have stabilised rather than deteriorated. Nonfarm payroll growth, while softer through mid-2025, has averaged roughly 73,000 jobs per month since October. The unemployment rate has remained contained in a narrow 4.2%–4.4% range for nearly a year. Broader indicators, including wage measures and the Employment Cost Index, continue to signal firm nominal income growth, while recent improvements in ISM employment components suggest hiring intentions have steadied.Household balance sheets are described as robust. Wealth has reached record levels, supported by gains in equities and property markets. Many households locked in historically low borrowing costs during the pandemic, while marginal borrowers are now seeing adjustable rates ease modestly. This combination, Westpac argues, leaves consumers well positioned to sustain renovation activity, housing demand and discretionary spending into 2026.Sentiment remains the principal vulnerability. Consumer confidence measures sit well below historical averages, reflecting lingering concerns over inflation’s impact on real incomes. Businesses, meanwhile, face two-sided risks: potential supply constraints from tariffs and labour shortages, alongside uncertainty over consumers’ pricing tolerance.Against this backdrop, Westpac cautions that persistent above-trend consumption and capacity constraints may complicate the Federal Reserve’s task of returning inflation to its 2% target. Core services inflation remains elevated. The bank has therefore delayed its expectation for the final rate cut of this cycle to June 2026, though it acknowledges low conviction and sees a greater probability that the Federal Open Market Committee remains on hold if growth and inflation outperform. This article was written by Eamonn Sheridan at investinglive.com.

Washington escalates sanctions enforcement with another long-range tanker interception.Posting this with Globex oil trade about to open for the new week. Summary:US boards second tanker, intercepting the Panama-flagged Veronica III in the Indian Ocean. Operation followed long-distance tracking from the Caribbean amid sanctions enforcement. Vessel carried 1.9 million barrels and is sanctioned by the US Treasury. Part of broader blockade strategy, targeting Venezuelan oil exports under Trump’s directive. Exports sharply curtailed, with loadings reportedly halved since enforcement intensified.The United States has boarded a second oil tanker linked to Venezuelan exports in the Indian Ocean, escalating enforcement of sanctions aimed at curbing Caracas’ oil trade.The Pentagon confirmed that US forces conducted what it described as a “right-of-visit, maritime interdiction and boarding” operation against the Panama-flagged tanker Veronica III. The vessel had been tracked from the Caribbean Sea across thousands of nautical miles before US forces intercepted it in the Indo-Pacific region. Officials did not specify whether the ship was seized outright or permitted to continue its voyage following inspection.Washington said the tanker was operating in defiance of measures imposed under President Donald Trump’s directive to quarantine sanctioned Venezuelan oil shipments. The administration has intensified efforts to restrict exports from Venezuela, targeting vessels suspected of transporting crude in violation of US sanctions.The Veronica III reportedly departed Venezuela on 3 January carrying approximately 1.9 million barrels of crude oil. According to shipping monitors, the vessel has been involved in transporting sanctioned oil, including cargoes linked to Venezuela, Russia and Iran, since 2023. It is currently subject to sanctions from the US Treasury Department.This marks the second interdiction in the Indian Ocean within a week. US forces previously boarded and inspected the tanker Aquila II, which had also been tracked over long distances. The Pentagon’s messaging stressed that geographic distance would not shield sanctioned shipments from enforcement, underscoring the global reach of US naval operations.The broader crackdown has significantly curtailed Venezuelan crude exports. Since late last year’s blockade announcement, only shipments associated with Chevron and bound for the United States have continued operating largely uninterrupted. Independent estimates suggest Venezuelan oil loadings have roughly halved in recent months.The move signals Washington’s willingness to project power well beyond regional waters in order to enforce energy sanctions, reinforcing geopolitical pressure on Caracas and tightening constraints on global flows of sanctioned crude. This article was written by Eamonn Sheridan at investinglive.com.

IMF says Australia is landing softly, but inflation and global risks demand policy vigilance.Summary:IMF sees Australia achieving a soft landing, with growth rebounding to around 2% after a weak 2024.Inflation eased then re-accelerated, with underlying price pressures back above 3% in late 2025.Growth expected to hold near 2% in 2026, supported by monetary easing and firmer private demand.Risks skewed to slower growth and higher inflation, amid global trade uncertainty and domestic supply constraints.Policy guidance: vigilance required, with support for RBA’s data-dependent stance and medium-term fiscal consolidation.The International Monetary Fund has concluded its 2026 Article IV consultation with Australia, assessing the economy as navigating a “soft landing” but warning that risks remain tilted toward slower growth and renewed inflation pressures.Economic momentum improved through 2025, with GDP growth rising to 2.1% year-on-year in the September quarter after a subdued 2024. The recovery has been supported by gradually strengthening private demand. As spare capacity narrowed, inflation eased through mid-2025, allowing monetary policy to be loosened. However, price pressures have since re-intensified, with underlying inflation climbing back above 3% in the third quarter of 2025.Labour market conditions are gradually softening from previously tight levels. The unemployment rate has edged up to 4.3%, though this remains low by historical standards. Meanwhile, easing financial conditions have contributed to a rebound in house prices, and dwelling investment is beginning to recover.Looking ahead, the IMF expects the expansion to continue. Growth is estimated at 1.9% for 2025 and forecast to rise to 2.1% in 2026, supported by the lagged effects of earlier monetary easing and firmer consumer sentiment. Inflation is projected to return to the midpoint of the Reserve Bank of Australia’s 2–3% target band in the second half of 2027 as services price pressures moderate. Wage growth is anticipated to slow further, partly reflecting weak productivity performance.The Fund cautioned that risks remain skewed to the downside. Global trade tensions, financial market volatility and commodity price swings could weigh on demand, while domestic supply constraints and persistent labour tightness may prolong inflation. Climate risks and shifting global energy demand also pose medium-term challenges.Directors endorsed the Reserve Bank of Australia’s recent policy tightening and its data-dependent approach, emphasising the need for vigilance amid uncertainty. They welcomed progress in strengthening central bank governance and communication.On fiscal policy, the IMF supported medium-term consolidation to rebuild buffers, alongside targeted reforms to lift productivity and improve housing supply. While financial stability risks are viewed as contained, directors stressed continued supervision, macroprudential flexibility and coordinated structural reform to bolster long-term growth and resilience. This article was written by Eamonn Sheridan at investinglive.com.

New Zealand retail card spending -1.1% m/m in January, reversing December’s +0.1%. Total card spending also declined, -0.7% on the month after a 1.0% fall previously.In annual terms, electronic retail card spending edged up 0.4% y/y.Card spending data covers around 68% of core retail sales in NZ. Its used as the main retail sales indicator for the country. This article was written by Eamonn Sheridan at investinglive.com.

NZ services expand modestly, but confidence and hiring remain subdued.Summary:PSI slips but stays in expansion, easing to 50.9 from 51.5 and remaining above the 50 threshold.Growth below long-run average, with January’s reading under the historical norm of 52.8.Activity and new orders positive, signalling ongoing turnover and forward demand support.Employment and inventories weak, both in contraction, pointing to cautious hiring and stock management.Confidence still fragile, with negative commentary rising despite signs the broader economy is stabilising.New Zealand’s services sector remained in expansion territory at the start of 2026, although momentum eased slightly from the previous month.The BNZ–BusinessNZ Performance of Services Index (PSI) slipped to 50.9 in January from 51.5 in December. While still above the 50-point threshold that separates expansion from contraction, the reading was 0.8 points lower on the month and below the long-run survey average of 52.8. The data suggest the sector is growing, but only modestly, and remains some distance from a robust recovery.Within the detail, performance was mixed. Two of the five key sub-indices remained in expansion. Activity and sales led the gains at 54.2, signalling that some firms continue to see solid turnover. New orders also stayed positive at 51.8, pointing to a degree of forward demand. However, stocks/inventories fell back into contraction at 49.7, while employment weakened further to 49.1, indicating ongoing caution around hiring.Business sentiment remains fragile. Nearly 59% of comments received in January were negative, a noticeable increase from December and November. Respondents cited a combination of seasonal factors — including the Christmas–New Year holiday period and related shutdowns — alongside subdued enquiry levels and an extended post-holiday lull. Elevated living and operating costs were also highlighted as ongoing pressures.The composite Performance of Composite Index (PCI), which combines services and manufacturing indicators, eased to 52.5 from a previously reported 53.9. Despite the pullback, it continues to signal overall economic expansion.BNZ economists argue that the broader data flow suggests the economy may be turning a corner after a challenging period. While growth remains uneven and confidence subdued, recent indicators have been consistent with a gradual stabilisation in activity.The January readings reinforce the narrative of an economy moving forward, but cautiously. Expansion is present, though not yet broad-based, and labour market softness remains a key area to watch. This article was written by Eamonn Sheridan at investinglive.com.

Beijing pivots toward consumption-led growth as export reliance faces mounting global headwinds.While Chinese President Xi Jinping spoke on Sunday, take note that Chinese markets are closed all this week:Lunar New Year 2026: Mainland China markets are scheduled to be closed February 16–23Summary:Xi pivots toward domestic demand, calling consumption and investment the “main driver” of growth.China bracing for global uncertainty, despite a record trade surplus amid US tariff tensions.Exports masked weak domestic momentum in 2025, with 5% GDP growth supported by strong semiconductor shipments.Policy focus on incomes and innovation, including higher pensions, livelihood-linked investment and new growth industries.Measured fiscal support ahead, with no large stimulus planned, but continued efforts to stabilise property and employment.Chinese President Xi Jinping has underscored the need to make domestic demand the primary engine of China’s economic growth, signalling a strategic pivot as global trade uncertainty intensifies.In remarks delivered at December’s Central Economic Work Conference and published on Sunday, Xi stressed that growth must be anchored in consumption and investment at home. He called for coordinated efforts to stimulate spending and expand investment while fully utilising what he described as the advantages of China’s “super-large-scale market.” Improving household livelihoods, stabilising investment and fostering sustainable long-term growth were positioned as central priorities.The policy blueprint reflects Beijing’s expectation of a more volatile external environment. China posted a record trade surplus last year despite the ongoing tariff conflict with the United States, but policymakers appear increasingly cautious about relying heavily on export-led expansion. Rising protectionism and pushback from trading partners over low-cost Chinese goods have heightened the urgency of rebalancing growth toward domestic consumption.China’s economy expanded 5% last year, with exports offsetting softer private consumption and a sharp downturn in investment, particularly in property. However, officials acknowledge that such an imbalanced model may prove difficult to sustain as geopolitical and trade risks mount.Xi reiterated that innovation will remain central to the country’s development strategy, pledging to accelerate the cultivation of new growth drivers and emerging industries. At the same time, measures aimed at strengthening household income — including higher wages and pensions for rural and urban residents — are intended to reinforce consumer spending power. Investment projects tied directly to public welfare are also set to receive greater emphasis.Additional priorities include advancing high-quality development, promoting green transformation, continuing economic opening, and addressing structural distortions. Xi urged officials to curb destructive price competition among firms — part of the so-called “anti-involution” campaign — while also stabilising the property sector and supporting employment for graduates and migrant workers.Although Beijing has signalled continued policy support, it is not preparing a large-scale stimulus surge. Authorities plan to maintain what they describe as a necessary fiscal deficit and steady government spending into 2026, suggesting a calibrated rather than aggressive approach to sustaining growth. This article was written by Eamonn Sheridan at investinglive.com.

The key market influence today is the closure of Chinese mainland markets and half days on ly in Hong Kong and Singapore (more detail below the screenshot). The calendar lists China house price data due today. These were published last week:China house prices continue their death spiral: January -3.1% y/y and -0.4% m/mJapanese economic growth data will be eyed. Fourth-quarter GDP is expected to have expanded by 0.4% from the previous quarter, lifting annual growth to 1.6%. Analysts see improvement coming from a recovery in construction activity as the drag from temporary safety rules eases, alongside firmer export performance supported by strong global demand for semiconductors.Trade figures for January point to ongoing momentum in chip exports. Favourable calendar effects and a low comparison base are also likely to flatter headline export growth rates.The boost from additional fiscal spending is projected to show up more clearly in the first quarter of 2026 rather than in the fourth quarter data. Meanwhile, any fallout from tensions between China and Japan is not expected to have had a meaningful impact on Q4 results.Overall, steady political conditions and resilient semiconductor demand are viewed as key supports for both manufacturing output and services activity.I posted all this last week, repeating now ICYMI:Lunar New Year (LNY) 2026 brings thin liquidity and China-offshore price discovery, with travel/consumption the key narrative.Summary:Lunar New Year 2026 (Year of the Horse) falls on Tuesday 17 Feb.Mainland China markets are scheduled to be closed Feb 16–23, reopening Tue Feb 24.Hong Kong has half-day trading on Mon Feb 16, is closed Feb 17–19, and reopens Fri Feb 20.Singapore (SGX) has half-day trading on Mon Feb 16 and is closed Feb 17–18.China is running an extended nine-day Spring Festival holiday (Feb 15–23) with officials expecting a record travel surge, supportive for consumption narratives, but liquidity will be thin.Lunar New Year 2026 lands on Tuesday 17 February and, as usual, it will reshape trading conditions across mainland China, Hong Kong and Singapore, with liquidity effects often as important as the headlines.Onshore, China’s equity market enters its biggest scheduled trading interruption of the year.The Shenzhen Stock Exchange calendar shows the market closed from Monday 16 February through Monday 23 February, resuming Tuesday 24 February.The Shanghai Stock Exchange (SSE) will be closed for the 2026 Lunar New Year (Spring Festival) from Monday, February 16, 2026, to Monday 23 Feb 2026 (inclusive) Reopens: Tuesday 24 Feb 2026With A-shares shut, price discovery shifts offshore (CNH, H-shares, ADRs, commodities proxies), while onshore macro/credit headlines can “bottle up” and reprice quickly when domestic trading resumes.This year the macro overlay is the extended nine-day public holiday (Feb 15–23) and a policy push to encourage spending and travel, with officials projecting a record travel rush. That tends to support short-term themes in consumer, travel, catering, duty-free and tourism names, while also lifting scrutiny on high-frequency indicators (mobility, domestic flight bookings, hotel occupancy, box office, and retail receipts) as a real-time read on confidence.Hong Kong becomes the key regional venue for China beta during the A-share closure. HKEX lists half-day trading on Monday 16 February (Lunar New Year’s Eve) and full market holidays Tuesday 17 through Thursday 19 February, with normal trade resuming Friday 20 February. Expect thinner depth, wider spreads and a higher sensitivity to CN headlines.Singapore also sees disrupted liquidity. SGX notes half-day trading on 16 February, with the market closed 17–18 February. Regionally, the practical market impact is a short window where positioning gets lighter, volatility can be jumpy on small flows, and “reopen gaps” become a feature, especially if FX or commodities move sharply while China is closed. This article was written by Eamonn Sheridan at investinglive.com.

Not too much change from late Friday:EUR/USD 1.1875 USD/JPY 152.66 GBP/USD 1.3641 AUD/USD 0.7072 USD/CAD 1.3609 USD/CHF 0.7685NZD/USD 0.6033I'll be back with weekend news soon. This article was written by Eamonn Sheridan at investinglive.com.

Sun: Japanese Prelim. GDP (Q4)Mon: US Holiday (Washington's Birthday/Presidents Day); Eurogroup Meeting; Swedish Unemployment (Jan), EZ Industrial Production (Dec)Tue: RBA Minutes (Feb); UK Unemployment/Wages (Dec), German ZEW (Feb), US ADP Weekly, Canadian CPI (Jan), NY Fed (Feb), Chinese Lunar New Year (Hong Kong markets closed from 17th-19th Feb)Wed: RBNZ Announcement, FOMC Minutes (Jan); Japanese Trade Balance (Jan), Australian Wage Price Index (Q4), UK CPI (Jan), US NY Fed (Feb), Industrial Production (Jan)Thu: Japanese CPI (Jan), Australian Employment (Jan), US Trade Balance (Dec), Weekly/Continuing Claims, Philadelphia Fed (Feb), Pending Home Sales (Jan), EZ Flash Consumer Confidence (Feb), New Zealand Trade Balance (Jan)Fri: Hong Kong markets return from Lunar New Year; ECB EZ Indicator of Negotiated Wages; UK Retail Sales (Jan), PSNB (Jan), EZ/UK/US Flash PMIs (Feb), Canadian Retail Sales (Jan),US PCE/GDP (Dec/Q4)Japanese Prelim GDP (Sun): Q4 Q/Q GDP is forecast to have risen 0.4%, with Y/Y growth seen at 1.6%. ING expects a more modest 0.3% Q/Q expansion, driven by a rebound in construction as the impact of temporary safety regulations fades and firmer exports supported by robust global semiconductor demand. January trade data highlight continued strength in chip exports, with favourable calendar effects and a low base likely to boost headline export growth. The impact of supplementary budget spending is expected to become more evident in Q1 2026 rather than Q4, while no material effect from China-Japan disputes is anticipated in the Q4 data. Stable political conditions and strong chip demand are also seen underpinning manufacturing and services activity.Canadian CPI (Tue): The Canadian inflation report will help shape expectations for BoC policy. The BoC is currently on hold but is keeping its options open. Recent minutes said the policy rate is on the stimulative side of the Bank’s estimated neutral range, and policymakers agreed that holding rates at the current level was conditional on the economy evolving in line with their outlook, warning that heightened uncertainty has broadened the range of possible outcomes. Members said it was difficult to predict the timing and direction of the next policy move and would continue to monitor risks closely, standing ready to respond if the outlook changes. On inflation, the BoC noted that escalating tensions could disrupt global supply chains and weigh on activity, posing both upside and downside risks to prices. On the USMCA review, it said this posed downside risks to growth and could pull inflation lower if the economy weakens, though higher import costs, potential counter-tariffs and supply chain disruptions could lift inflation. Amid the uncertainty, the BoC agreed to maintain optionality in setting policy. In a speech, Governor Macklem stressed the bank must be careful not to misdiagnose economic weakness, saying policy should not attempt to offset lost supply, particularly as the Canadian economy undergoes structural change. Money markets are pricing no change in rates for the remainder of the year.RBA Minutes (Tue):The RBA will release minutes of its meeting earlier this month, when it raised the Cash Rate for the first time in more than two years by 25bps to 3.85%, as expected, with the decision unanimous. The bank said inflation was likely to remain above target for some time and that broad measures of wage growth continued to be strong. It added that labour market conditions were somewhat tight and capacity pressures greater than previously assessed and noted uncertainty around the outlook for domestic economic activity and inflation, and the extent to which monetary policy is restrictive. The RBA also published its latest Quarterly Statement on Monetary Policy, stating that underlying inflation was higher than expected and that GDP growth had continued to pick up, with private demand surprisingly strong. It raised its trimmed mean and CPI inflation forecasts and lifted its December 2025 GDP projection but lowered its year-end GDP forecasts for December 2026 and December 2027. The forecasts assumed the Cash Rate at 4.2% in December 2026 and 4.3% in December 2027. Governor Bullock said at the press conference that the pulse of inflation was too strong and that high inflation hurt all Australians, adding that the Board believed inflation would take longer to return to target and could not allow it to get away.UK Unemployment/Wages (Tue):November’s Unemployment rate came in above consensus at 5.1% (exp. 5.0%), with the overall skew from the series a dovish one, as while the hotter-than-expected wage figure was a hawkish impulse, it is a familiar one. This week’s series is expected to feature a steady unemployment rate and a decline in payrolls. As a reminder, the February BoE MPR saw the peak unemployment forecast raised to 5.3% from the previous, and current, rate of 5.1%; i.e. the MPC expects a further deterioration in the jobs market. Note, given the remarks by BoE’s Bailey in the last statement, wages are perhaps worth watching even closer than normal, after he caveated his increased confidence on the path of wage inflation by adding it is less clear when the inflation downside will feed into wages; i.e., a marked drop in wages could tilt him to a March cut vs current pricing for April. However, overall, the series will inform but is unlikely to determine the timing of the next BoE cut, with the week’s inflation series (see below) more pertinent in that deliberation.RBNZ Announcement (Wed):The RBNZ will hold its first policy meeting of the year next week, where it is widely expected to keep the Official Cash Rate unchanged at 2.25%, with money markets pricing a 98% probability of no change. The meeting will be the first under Governor Breman, who took office in December. At its previous meeting in November, the RBNZ cut rates by 25bps, its third consecutive reduction, bringing cumulative easing to 325bps since it began its rate-cutting cycle in August 2024. The bank left the door open to further moves, saying future changes to the OCR would depend on how the outlook for medium-term inflation and the economy evolves, although its projections implied a pause through 2026. The RBNZ noted that annual consumer inflation rose to 3% in the September quarter but said spare capacity in the economy should see inflation fall to around 2% by mid-2026, with risks to the outlook balanced. Then-Governor Christian Hawkesby said policymakers were well placed to mitigate risks and that the central projection was for the Cash Rate to remain on hold through 2026, while retaining full optionality with every option on the table. He later acknowledged the bank had lowered the cash rate significantly and was more confident the OCR was now stimulatory, adding that the hurdle for further cuts was high and that it could not keep the door open to easing indefinitely. Governor Breman has also signalled openness to further adjustments, but without urgency, saying the RBNZ had made significant progress towards its mandated objectives and was closely monitoring data, including inflation and GDP. She said there was no preset course for monetary policy and that the bank would adjust if the inflation outlook changed. Breman added that the economic outlook had evolved broadly in line with expectations and that the forward path for the OCR published in the November monetary policy statement pointed to a slight probability of another cut in the near term, though if conditions evolve as expected the OCR is likely to remain at 2.25% for some time.FOMC Minutes (Wed):The Fed left rates unchanged at 3.50-3.75%, as expected, in a 10-2 vote, with Governors Miran and Waller dissenting in favour of a 25bps reduction. Miran had previously voted for a 50bps cut in December. The January statement upgraded its economic assessment, replacing “economic activity has been expanding at a moderate pace” with “expanding at a solid pace”, “job gains have slowed this year” with “job gains have remained low”, and “the unemployment rate has edged up” with it having “shown some signs of stabilisation”. It also simplified “inflation has moved up since earlier in the year and remains somewhat elevated” to “inflation remains somewhat elevated”. In its risk characterisation, December’s addition that the Committee “judges that downside risks to employment rose in recent months” was removed, leaving only that it is attentive to risks on both sides of the mandate. The statement’s tone was slightly more positive on the economy and labour market and broadly unchanged on inflation. Ahead of the decision, traders looked for signals on the future policy path, but the statement offered no immediate clues and Chair Powell’s press conference provided little by way of new information. Powell noted that decisions will be made on a meeting-by-meeting basis, guided by the data and balance of risks. He said policy is well positioned, reiterating it is currently within a plausible neutral range, but towards the higher end. If Fed sees goods pricing peaking over this year, that suggests the Fed can loosen policy further. Powell highlighted that data since the December meeting has improved the outlook. Inflation remains somewhat elevated. Goods and tariff-related inflation expected to peak around mid-2026, with many effects already passed through. He noted that the labour market has weakened alongside solid growth, but recent data suggests stabilisation following a period of cooling. Job gains remain subdued, and while risks to employment have diminished, they have not disappeared, making it difficult to judge whether the dual mandate is fully in balance. Since the January meeting, Governor Waller (voter) has argued policy remains too restrictive, the labour market “does not look remotely healthy”, and tariff-driven inflation should be looked through. Governor Miran (voter) has said underlying inflation is not problematic and rates should be materially lower, warning policy may be passively tightening, though he added that after this week’s jobs data his concerns about the labour market have eased slightly. Governor Cook (voter) stressed stalled disinflation and the need to maintain credibility. Vice Chair Jefferson (voter) described policy as well positioned, expects tariff effects to fade and inflation to ease in 2026. Logan and Hammack (both 2026 voters), characterised rates as around neutral, signalling no urgency to cut unless labour conditions deteriorate materially. Among non-voters, Musalem and Schmid cautioned against further easing with inflation near 3%, while Daly, Barkin and Bostic emphasised resilience but warned inflation remains above target. Note, the minutes are an account of the January 28th meeting, so it will not incorporate the January jobs report and CPI data. UK CPI (Wed):December’s print was hotter-than-expected at the headline level, though subject to caveats amid Budget-driven tobacco changes and elevated airfares due to the timing of return flights over the Christmas period. Pertinently, the core Y/Y figure was either in-line or cooler depending on the consensus used; however, all services ticked higher, though by less than some expected. An unwinding of the one-off impacts in December should see the headline moderate in January, with Pantheon Macroeconomics forecasting a 3.0% Y/Y print, though that is above the BoE MPC’s 2.9% forecast. As a reminder, the February MPR saw the inflation forecasts lowered across the next three years, and the statement remarks that the “outlook for inflation over the next six months is notably lower than expected in November”, primarily due to energy prices, including the impact of fiscal policy. The January series will be the main factor informing on whether the BoE cuts in March (-19.5bps priced) or April (-26.9bps). The language from the statement was balanced and kept the focus on the medium term. As a reminder, February was a 5-4 split with Bailey the tie break; on inflation, the Governor said he expects to see “quite a sharp drop in inflation over coming months”. If CPI prints in-line with Pantheon’s view, that is undoubtedly a sharp drop. However, the “coming months” emphasis by Bailey skews the bias to April vs March. Overall, CPI will have the main role to play in determining the timing of a cut, and if we see the moderation desks are looking for in prices, along with continued labour market pressures, a wage pullback and/or soft retail metrics, then March may move towards being priced.Australian Employment (Thu):Westpac expects employment to rise by 40k (prev. +65.2k), with the participation rate edging up to 66.8% (prev. 66.7%) and the unemployment rate ticking up to 4.2% (prev. 4.1%). The labour market ended 2025 on a choppy note, the bank says, with a weak November followed by a strong December, though analysts caution that seasonal volatility - particularly around year-end and January hiring patterns - complicates the signal. Westpac judges the data reflect a solid finish to 2025 rather than a clear re-tightening in conditions, with employment growth likely near its trough as care-sector effects unwind and private demand stabilises. January data will be closely scrutinised by the RBA amid renewed inflation pressures, with attention on participation dynamics, population re-benchmarking and "marginally attached" workers, which have distorted recent January prints. Westpac expects a flatter employment recovery through 2026 and a gradual drift higher in unemployment over the year.Japanese CPI (Thu):Japan’s CPI is expected to slow sharply, with headline inflation seen at 1.5% Y/Y (prev. 2.1%), according to ING. The deceleration is largely attributed to government energy subsidies and stabilisation in food prices. ING expects inflation to moderate further in the coming months, reinforcing expectations that price pressures may remain contained in the near term. From a BoJ perspective, the central bank held rates steady in January to assess the impact of previous hikes and await key data from the Shunto spring wage negotiations.UK Retail Sales (Fri):Barclay’s consumer spending report for January showed a modest increase in car spending during one of the wettest months on record, with online and entertainment expenditures bolstered as a result. However, the weather would theoretically have had an impact on footfall to stores. Despite that, Barclays’ report showed retail spending rebounded 1.7% Y/Y after a relatively flat December, supported by January sales and online activity. On the point of footfall, the BRC report showed in-store sales having the “highest growth” in over six months, despite the poor weather. Overall, the series should be robust and broadly in-fitting with the December print of 0.4% Y/Y.EZ Flash PMIs (Fri):Expectations are for Services to edge up from the prior reading, with some analysts seeing the Manufacturing component return to expansionary territory. As such, the Composite is expected to rise to 51.7 from 51.3. Taking a look at other activity figures, EZ Retail Sales fell 0.5% in December from +0.1% previously, while German Industrial Production missed forecasts by a wide margin, underscoring the uneven nature of the country’s recovery. This PMI report is unlikely to have a material impact on monetary policy, with the ECB reiterating that the Bank remains in a “good place”. February’s ECB statement said growth is resilient and recent communication has largely reiterated a data-dependent approach. Recent data has been broadly in line with staff projections, with increased focus on the stronger EUR and trade and geopolitical developments. The January report printed slightly below expectations, although the overall trend has been sideways. In the prior reading, HCOB said the “growth trajectory can be described as decent”, though not yet “comfortable”. Regionally, Germany, Italy and Spain have continued to expand since September, while France has been affected by the “difficult political situation”. Since the last report, the political backdrop has stabilised in the short-term after Prime Minister Lecornu forced an amended 2026 budget through.UK Flash PMIs (Fri):Investec forecasts the UK Composite PMI at 53.6, marginally below the prior 53.7, with slight downticks expected in both Manufacturing and Services, suggesting a modest loss of momentum after the upward trend of recent months. Recent activity data have included a subdued December GDP report, alongside weak Manufacturing and Industrial Production figures. The report will be closely watched by policymakers at the BoE, which kept rates unchanged at 3.75% at its January meeting. The 5-4 vote split was more dovish than the expected 7-2. Governor Bailey described activity as “subdued”, while Lombardelli called it “weak”. Ramsden and Dhingra, who dissented in February, also took a downbeat view of the activity environment. The Bank cut its growth forecasts for Q1’26 and Q1’27. Money markets currently assign a 76% chance of a cut in March and have fully priced in a move by April. ING said that if recent weakness in growth and the labour market persists alongside easing wage growth, a March cut is “highly likely”.UK PSNB (Fri):December’s PSNB came in at GBP 11.6bln, around GBP 2.5bln below the consensus figure, however, still at an elevated level and the 10th highest December print on record, with the FY to December tally the 3rd highest on record. January’s data captures capital gains and self-assessment payments ahead of the end-January deadline, and as such the series can be volatile and subject to significant and often one-off swings. As a reminder, the OBR expects receipts from capital gains to increase substantially over the next few years; a factor that may be seen in the January figure if participants elected to sell-off assets ahead of the 2025 Autumn Budget. An increase in such payments (potentially sparking a negative borrowing figure) would be welcome by the Treasury and would, if only temporarily, provide a welcome positive headline on the UK economy for the Labour government at the moment.US PCE (Fri):PCE prices, the Fed’s preferred inflation gauge, will be critical for policymakers and markets in assessing the future path of interest rates. Consensus expects December PCE to show firmer price pressures than recent CPI prints, with measures such as food and producer prices pointing to upside risks. Analysts note that the ‘wedge’ between CPI and PCE could produce a hotter PCE reading, partly because PCE places greater weight on categories where prices are rising more sharply. At his press conference following the FOMC’s January meeting, Chair Powell said estimates based on CPI data indicate headline PCE rose 2.9% Y/Y in December, up from 2.8%, while core PCE, excluding food and energy, likely rose 3.0% Y/Y from 2.8%. He said the elevated readings largely reflect goods inflation boosted by tariffs. The Fed’s December projections pencilled in one additional cut for 2026, though policymakers have recently indicated this depends on further progress towards the inflation target, given the labour market has outperformed expectations. Powell reiterated that decisions will be taken on a meeting-by-meeting basis, guided by data and the balance of risks. He said inflation has evolved broadly as expected but remains somewhat elevated, with no progress on core PCE last year as the overshoot was driven mainly by goods prices, tariffs and one-off factors rather than demand. Goods and tariff-related inflation are expected to peak around mid-year, with many effects already passed through. Powell said that if tariff effects on goods prices peak this year, it would signal scope to loosen policy. Short-term market-based inflation expectations have fully retraced since “Liberation Day”, while longer-term measures indicate confidence that inflation will return to 2%.US GDP (Fri): The preliminary Q4 GDP estimate is expected to show US growth cooling from Q3’s 4.4% annualised pace. The Atlanta Fed’s GDPNow tracker models growth at 3.7%, revised down after softer core retail sales in December and downward revisions to November, pointing to moderation in consumer spending from the prior quarter’s 3.5% pace. Activity nevertheless appears resilient. In its December SEP, the Fed projected 2026 growth at 2.3%, upgraded from 1.8% in its September forecasts; in January, the FOMC described the economy as expanding at a “solid pace”, while Chair Powell said growth is on a firm footing despite trade policy changes, cautioning that quarterly GDP can be volatile. Vice Chair Jefferson has struck a cautiously optimistic tone on 2026, expecting growth slightly above trend. He highlighted the possibility that productivity gains, including from AI investment, could allow faster expansion without reigniting inflation, though he stressed it is too early to assess their durability. Some analysts say focus will be on whether Q4 confirms a controlled slowdown rather than a sharper loss of momentum, and the implications for policy. The Fed’s rate path appears to hinge on further progress towards its 2% inflation goal, with most policymakers seeking clearer evidence of disinflation before backing lower rates.This article originally appeared on Newsquawk. This article was written by Newsquawk Analysis at investinglive.com.

Bitcoin Futures are hovering near $68,800 in mid-February 2026, attempting to stabilize after a sharp retracement from last year’s surge above $110,000. At the same time, Ethereum Futures are trading close to $2,050, nearly 50% below their prior highs above $4,000. While crypto appears to be “holding,” the broader backdrop tells a more complex story.Nasdaq Futures, which climbed above 26,000 during the late-2025 expansion phase, have cooled materially and are now trading closer to the 24,800 region. The index is no longer delivering clean upside momentum, and recent weeks show more rotational behavior than sustained expansion. That shift in macro tone matters because crypto’s recent stabilization is occurring within a softer risk environment.The key question for investors right now is whether Bitcoin’s consolidation near $68K represents early accumulation, or simply a pause within a broader distribution phase. Ethereum’s deeper retracement and weaker relative structure add another layer of caution. When cross-asset positioning is examined together rather than in isolation, the message is clear: crypto is not yet leading the next risk-on cycle.Nasdaq Futures: Cooling Momentum Without CapitulationThe broader macro backdrop is critical here.Since peaking above 26,000 in late 2025, Nasdaq Futures have pulled back roughly 5–7 percent. That may not sound dramatic, but the internal structure has shifted. Upside attempts over the past several weeks have required more effort and delivered less follow-through. Downside weeks, by contrast, have produced cleaner directional movement.This matters because crypto does not operate in isolation. When equities enter a rotational or cooling phase, high-beta assets typically require strong independent leadership to outperform. That leadership is currently missing.Importantly, this is not a panic environment. There is no evidence of forced liquidation across equities. Instead, participation has cooled. That subtle distinction changes the probability of what comes next.Rotation tends to produce choppy rallies, not sustained breakouts.Bitcoin: Stabilization After a 37% ResetBitcoin’s move from above $110,000 to the current $68,800 region represents a reset of roughly 37 percent. Historically, Bitcoin has experienced similar retracements within broader cycles, but what makes this phase notable is the nature of the rebound.Over the last several weeks:Bounce attempts have been moderate rather than explosive.Price has not reclaimed prior breakdown zones above $75,000–$80,000.Upside sessions have lacked sustained follow-through.The key structural detail many overlook is this: stabilization alone does not equal accumulation.True accumulation phases tend to show expanding participation alongside improving upward efficiency. What we are currently observing is compression — price holding, but not aggressively reclaiming lost ground.That distinction may determine whether Bitcoin forms a base in the coming months or drifts lower in alignment with broader macro softness.Ethereum: The 50% Drawdown Tells a Different StoryEthereum’s situation is more fragile.From highs above $4,000 to current levels near $2,050, ETH is down nearly 50 percent. That magnitude of drawdown exceeds Bitcoin’s retracement and reinforces Ethereum’s role as the higher-beta component of the crypto complex.More importantly, Ethereum has not demonstrated relative leadership during this stabilization period.In recent weeks:ETH has underperformed Bitcoin on rebound attempts.Upside moves have stalled below prior structural resistance.The asset remains closer to breakdown territory than breakout territory.This relative weakness is new information that often goes unnoticed. While headlines focus on “crypto holding,” the internal hierarchy shows Ethereum acting as the pressure point.Historically, when Ethereum underperforms Bitcoin during stabilization phases, it suggests caution rather than imminent upside acceleration.Relative Strength Hierarchy: The Market’s Hidden SignalWhen we rank the assets by structural strength as of February 2026:Nasdaq Futures – cooling but structurally intactBitcoin Futures – stabilizing but not leadingEthereum Futures – weakest and most fragileThis ranking is not based on price alone. It reflects directional efficiency, recovery quality, and relative performance across multiple timeframes.The absence of a leader is the key takeaway.In strong risk-on environments, one asset typically pulls ahead decisively. That is not happening right now. Instead, we see synchronized stabilization within a cooling macro regime.That combination reduces the probability of immediate upside acceleration.What Would Change the Narrative?For sentiment to shift meaningfully:Nasdaq Futures would need to regain sustained upside momentum and hold above recent consolidation levels.Bitcoin would need to reclaim the $75,000–$80,000 region with follow-through.Ethereum would need to outperform Bitcoin on a weekly basis, not just bounce alongside it.Until those developments occur, rallies may represent rotational rebounds rather than confirmed trend reversals.Why This Phase Is Different From Prior Crypto CorrectionsIn previous cycles, Bitcoin often decoupled from equities during critical turning points. In early 2026, that decoupling has not materialized.Instead:Crypto is stabilizing within a cooling macro regime.Ethereum is showing disproportionate weakness.Bitcoin is acting defensive rather than aggressive.This suggests the current environment is not one of panic liquidation, but neither is it one of renewed expansion.It is transitional.Transitional markets demand patience.Final Outlook: Rotation Before ExpansionAs of mid-February 2026:Bitcoin holds near $68,800 after a major reset.Ethereum trades near $2,050, down nearly 50 percent from highs.Nasdaq Futures remain below prior peaks, reflecting macro cooling.The data does not yet confirm accumulation across crypto. Instead, it points to stabilization within a broader rotational phase.For investors, that means monitoring relative strength and leadership, not just price bounces.For traders, it means recognizing that in cooling regimes, upside follow-through must prove itself.The next major move will likely begin with one asset breaking this hierarchy, not by bouncing, but by leading.Until then, the crypto market remains in reset mode rather than expansion mode. This article was written by Itai Levitan at investinglive.com.

US January CPI +2.4% y/y vs +2.5% expectedFed's Goolsbee sees encouraging and concerning parts of the CPI reportUS Supreme Court says next Friday will be a decision dayUS Treasury secretary Bessent says that metals tariffs decision will be up to TrumpOil prices dip on report that OPEC+ may resume oil output hikes from AprilThe haven from the AI disruption might be a HALOBoE's Pill: Disinflation is not as rapid or convincing as hopedMarkets:Gold up $112 to $5032WTI crude oil down 24-cents to $62.60US 10-year yields down 5.4 bps to 4.05%Bitcoin up $3000 to $68,815GBP leads, AUD lagsS&P 500 flatUS equity futures were deeply negative ahead of the CPI report but rebounded to unchanged afterwards as the numbers mostly cooled. After the open, bids steadily picked up and the S&P rose nearly 50 points at the peak. But late in the day the bears took over again and sent it into negative territory before a last minute bounce to flat. Shares of Amazon fell for the ninth straight day.The reaction elsewhere to the data was typically dovish as the US dollar slid and bonds rallied. The strength in fixed income is increasingly noticeable as investors look for a safe haven away from the intense volatility. The pound led the way on the hawkish comments from BOE chief economist Pill. The initial push came in Europe as cable rose a quarter cent to 1.3625 but after some selling into the London fix there was a second wave of bids late and a finish above 1.3650. Elsewhere it was more of a choppy day in FX with small moves.Gold posted an impressive rebound following the mysterious gap down yesterday. The $150 straight-line drop has almost been completely recovered as it climbed $80 in North American trade.Note that Monday is a holiday in Canada and the USA; enjoy the long weekend. This article was written by Adam Button at investinglive.com.

The US House voted against tariffs this week and the Senate is expected to follow suit. They will surely be vetoed by President Trump but that move gives some cover to the Supreme Court ahead of its big decision on tariffs.The court today announced that Feb 20, 24 and 25 will all be 'decision days' or days when they will render opinions. As a reminder, they don't pre-announce which cases they will be ruling on, so it could be tariffs and it could be one of the other dozens of cases before the court.Officials have until June to make a decision but given the gravity of the tariffs, it's expected to come sooner. The decisions are rendered at 10 am ET or just afterwards so on those three days we will be standing by and markets will be holding their breath.Previously, administration officials have signaled they could easily reconstitute tariffs but more recently, they toned down that rhetoric, highlighting that it could be difficult. That's a rare change of rhetoric and indicates the court decision could actually lower tariffs. If that's the case, it would clear the way for further Fed rate cuts and provide a double dose of good news for US companies. The Major Questions DoctrineCritical in the decision will be the reasoning of the court, particularly if that extends to some of the other measures the White House is considering. One of the avenues the court could go is the "major questions doctrine", something conservative justices pushed for in the Biden administration.Under the doctrine, the Supreme Court has rejected agency claims of regulatory authority when the underlying claim of authority concerns an issue of "vast economic and political significance" and Congress has not clearly empowered the agency with authority over the issueChallengers say this is a textbook major questions case. IEEPA shouldn't be read to give the president this power precisely because it would have such vast economic and political significance — and under the major questions doctrine, if Congress wants to give the president sweeping authority over matters of major economic and political significance, it has to say so clearly. Justice Barrett asked a pointed question: whether the government could identify any other place in the US Code where the phrase "regulate importation" had been used to confer tariff-imposing authority. The Solicitor General struggled to answer.When the government argued the major questions doctrine doesn't apply to foreign affairs, Justice Sotomayor shot back: "We have never applied it to foreign affairs, but this is a tariff. This is a tax."That kind of reasoning might apply to any attempts to reconstitute tariffs if it's the reason tariffs are struck down. This article was written by Adam Button at investinglive.com.

Chicago Fed President Austan Goolsbee spoke with Yahoo Finance today and had some notable comments:Encouraging and concerning parts in latest CPIWe are still seeing pretty high services inflationHopes we've seen the peak impact of tariffsThe job market has been steady, only modest coolingRates can still go down but need to see progress on inflationConsumers should hold up if the jobs market is stable and inflation easesI don't know how restrictive Fed policy isHigh services inflation is worrisomeWe are not on a path back to 2% inflation, stuck around 3%December CPI came in slightly cooler than expected, with headline inflation rising 0.2% month-over-month versus the 0.3% consensus, while the year-over-year rate held at 2.5%. Core inflation matched expectations at 2.5% annually and 0.3% monthly. Real weekly earnings flipped positive at +0.5%, a notable improvement from the prior revised -0.5%. Supercore printed at 2.7% year-over-year. Markets reacted with a modest dovish repricing of Fed expectations, pressuring the dollar lower. In the bond market, the notable move this week has been in the long end, following a surprisingly strong auction and the turmoil in equities. Thirty-year yields have slid to 4.70% from 4.90% this week.The US economic calendar was busy this week but quiets considerably next week, in part due to the President's Day holiday on Monday. On Tuesday we get the Empire FEd and NAHB housing market index. Wednesday we get durable goods and housing starts. Thursday we get initial jobless claims as usual and Friday is the PCE report.There is a smattering of Fedspeak throughout the week but it's tough to imagine that any of it will make any real waves given the data dependence that most policymakers are preaching. This article was written by Adam Button at investinglive.com.

We are done with the big banks and Big Tech. Now we get the real economy. Next week's earnings calendar is a tug-of-war between the resilient service-spending consumer and the battered industrial/goods sector.Here is the playbook for the week.Walmart (WMT)Thursday (Before Open) If "General Merch" (electronics, clothes, home goods) is positive, the consumer is feeling confident. If growth is purely from Grocery (inflation-driven necessities), the consumer is gasping for air. On inflation, watch for comments on deflation in goods. If Walmart mentions "rolling back prices" aggressively to move inventory, that’s a disinflationary signal for the Fed (and bearish for margins).2. DoorDash (DASH)Wednesday (After Close)Everyone says the consumer is "stretched," yet they are still paying $30 for a lukewarm burrito delivered to their door. If frequency holds up despite rising fees, it confirms that the "convenience economy" is inelastic. This is why services inflation (core PCE) refuses to die. A miss here would be the first real sign that the middle-class consumer is finally cutting discretionary "vices."John Deere (DE)Thursday (Before Open)Management has already hinted that 2026 will be the "bottom" of the cycle and the market has taken that to heart with a huge run-up in the stock price lately. If they further guide for strength, it signals that the industrial recession is ending. If they cut guidance further due to "tariff uncertainty" or weak export demand, the global growth narrative takes a hit.Palo Alto Networks (PANW)Tuesday (After Close)Is AI sucking all the oxygen (and budget) out of the room? Is anything safe? Cybersecurity is usually the last thing companies cut and it should be growing due to AI threats. If Palo Alto shows "billings fatigue" or longer sales cycles, it means CIOs are slashing core budgets to fund their AI experiments. That is a warning sign for the broader software sector (IGV), which has already been suffering.Analog Devices (ADI)Wednesday (Before Open)Unlike Nvidia (AI), ADI sells chips for cars, factories, and 5G towers. This is the "old school" economy chipmaker. We need to hear that the "inventory correction" is over. If ADI says customers are finally restocking industrial chips, it’s a bullish signal for manufacturing.6. Wayfair (W)Home builders quietly hit a record high on Friday on rate cut hopes. You don't buy new furniture if you aren't moving houses. Wayfair is a direct proxy for existing home sales, which were battered this week. Watch the Active Customer Count, this metric has been bleeding for quarters. If this stabilizes, it suggests the "housing freeze" is thawing and people are finally accepting 6% mortgage rates as the new normal. Opendoor (Thursday after close) is another housing proxy to watch.Full run down:MondayUS and Canadian markets are closed for holidays.TuesdayBefore the open: Energy Transfer, Medtronic, SunCoke EnergyAfter the close: Hecla Mining, Palo Alto Networks, Cadence Design Systems, Devon Energy, EQT, SSR Mining, Toll Brothers, Kenvue, MKS Instruments, FirstEnergyWednesdayBefore the open: Analog Devices, SolarEdge, Garmin, Moody’s, Liberty Global, ProPetro, Constellium, Verisk, Fiverr, ICLAfter the close: Kinross Gold, Carvana, Coeur Mining, Pan American Silver, DoorDash, Figma, Royal Gold, Equinox Gold, eBay, RemitlyThursdayBefore the open: Walmart, First Majestic Silver, Quanta Services, John Deere, Lemonade, Klarna, Visteon, Wayfair, Endava, NICEAfter the close: Opendoor, Transocean, Newmont, Akamai, CompoSecure, Live Nation, Sprouts Farmers Market, Texas Roadhouse, CentraGold, AXTFridayBefore the open: AngloGold Ashanti, Telix Pharmaceuticals, Portland General Electric, PPL, Oil States International, FET (Forum Energy Technologies), Lamar Advertising, Hudbay Minerals, Western Union, Cogent Communications This article was written by Adam Button at investinglive.com.

US stocks have turned around nicely today led by the Russell 2000, which is up 1.8%. The S&P 500 and Nasdaq are both up 0.6% and eyes are on software stocks. The IGV software ETF is up 2.3% after an utterly bruising performance so far this year.I'm careful not to lean too hard on this index because 20% of it is Microsoft and I see it as more of a disrupter than a disruptee. That said, it's been beaten up as well.If you look at the chart, it's found some support at last week's lows and if that continues to hold, the bulls could pile back in. Here are some beaten up software names that are doing well today:Salesforce +3.4%WDAY +1.8%NOW +4%Moody's +3.4%SPGI +2.7%In the bigger picture, it's still the old economy and mining stocks that are leading the way today.NEM +6.9%Ingersoll Rand +6.5%Vistra +4.5%Freight companies are also bouncing back from yesterday's AI disruption puke.Looking at the chart, there is a range from roughly 6800-7000 and that's the space to watch.I tend to think the downside is more vulnerable because the AI trade isn't going away but it's the kind of chart where you wait for a break rather than picking sides. Next week's calendar is far lighter on both economic data and earnings. That could help to cool volatility but I should note that the Supreme Court is back in session so the tariff decision could come. This earnings season was something of a disaster as even companies that reported beats often saw their stocks beaten up. I worry that MSFT's 12% drop on earnings was a powerful signal that nothing is safe. This article was written by Adam Button at investinglive.com.

It's not a proper investing theme until there is an acronym.I've been writing for a few weeks about old economy stocks making a comeback but it's been tough to frame exactly the kinds of companies that are best built for what's coming. The market is frightened by disruption and that's why software stocks have seen a massive re-rating lower, with many falling 30-50% in a few weeks. There's a cottage industry developing in commentating on which software companies will actually be disrupted by AI but to me, it's tough to say in the software and tech space as the essential function of AI is intelligence and all these white collar companies are powered by brains not steel.In contrast, money has flowed into sectors and companies that won't be disrupted by AI. I like the framing of HALO from Compound Advisors, which stands for Heavy Assets, Low Obsolescence.The asset part is self-explanatory and the 'low obsolescence' means that they can't be disrupted by AI. Here are a few names they highlight:Phillips 66 and Corning and Applied Materials and Vulcan Materials and Delta and Caterpillar and Ventas and Hershey may have very little to do with each other based on conventional GICS classification. But in my classification system, updated for today, they are all HALOIn the past, the market liked asset light models because they required less debt and had better margins. When you layer growth onto that, it results in supercharged profitability. That's led to 30-50x multiples in a crowded space but is quickly reversing as disruption is priced in.Asset heavy companies have been slow to grow because of huge capital requirements but since we're in a rate cutting cycle, that debt is less burdensome and that could be durable in an era of structurally high unemployment. It also means that the companies are virtually impossible to disrupt -- no one is building a new coast-to-coast railway.In addition (and I've made this point before), venture capital for the past 15 years has been so focused on tech and software that there is no money or expertise for developing startup heavy asset firms. The VC desert is the new moat.But that's not all. The low margin nature of these businesses has always been a drag on multiples but now I think it's an opportunity. These companies can't really be disrupted by AI but they can benefit from it.Picture a company with a $10 billion asset base with revenues of $2 billion and 3% margins. Think utilities, pipelines, ports, commodity producers, railways, airlines and refineries. The opportunity with AI is to improve efficiency. Even boosting margins by 1 percentage point in these companies can be a huge lift to profitability and cash generation. I would particularly look at companies with high employee counts or a high reliance on consultants/sub-contractors that can be trimmed. For these companies, AI is an optimization tool. If an airline can squeeze 2% fuel savings routing, dispatch, and operations then it's not revolutionary but it's a tailwind. If a refinery can optimize the fuel mix, monitor operations or better schedule downtime, it's meaningful.A SaaS company running 40% margins doesn't have much fat to optimize. But a pipeline operator or airline running 2-5% margins has enormous operational surface area where small AI-driven efficiencies compound into meaningful earnings growth.That's why I prefer to focus on the low margin aspect.I would rather call them HALM -- High Assets Low Margin -- but that's not as catchy.I like the framing of CNBC's Mike Santoli yesterday who talked about eye-watering capex from companies like Microsoft, Meta, Alphabet and OpenAI:"The hyperscalers are spending $700 billion. That better be killing something or what are we doing here?"How about this? Tangible Assets, Not Killable or TANK stocks.Or maybe MOAT stocks: Massive Operations, Asset-Thick.How about RAMP: Real Assets, Margin Potential.In any case, you get the idea. This article was written by Adam Button at investinglive.com.

Sector Overview: A Mixed Day Across the MarketThe stock market today showcases a complex landscape, with varied performances across sectors. Leading the charge, the healthcare sector is basking in green, while technology shows a mix of highs and lows.? Healthcare: Eli Lilly (LLY) surged by 1.40%, riding on positive sentiments, while Merck (MRK) continues its upward trend with a 1.92% increase. Collectively, these gains underscore robust investor confidence in drug manufacturers.? Technology: Mixed emotions run through technology stocks, with Oracle (ORCL) experiencing a promising 1.69% rise, but Nvidia (NVDA) dwindling slightly by 0.41%. The semiconductor space struggles as Micron (MU) slips by 3.16%, revealing investor caution.? Financials: The financial sector faces downward pressure, notably with JPMorgan Chase (JPM) plunging by 1.86%, reflecting ongoing market hesitancy amidst economic adjustments.? Consumer and Retail: Major players like Amazon (AMZN) and Walmart (WMT) show minor setbacks, dropping 0.27% and 0.89% respectively, possibly signaling consumer sentiment shifts as the holiday shopping season approaches.Market Mood and Trends: Navigating Uncertain WatersTodays’ market reveals a cautiously optimistic mood, as investors gauge economic indicators and sector-specific news. While some tech giants simmer, healthcare's strength offers glimpses of stability amidst turbulent times. This mixed sentiment could dictate forthcoming market behavior, with investors eyeing upcoming federal policies and quarterly earnings.Strategic Recommendations: Seeking Balance in VolatilityGiven the current market dynamics, investors should consider fortifying portfolios by embracing diversified strategies. Pay close attention to:Healthcare: The sector appears poised for growth, suggesting potential long-term investments.Technology: Exercise caution as semiconductors underperform, focusing instead on resilient players like Oracle.Financials: Monitor developing economic policies that may influence banking stocks adversely.Stay tuned to InvestingLive.com for real-time updates and insights as the week unfolds, ensuring you're equipped to make informed decisions amidst the market's twists and turns. This article was written by Itai Levitan at investinglive.com.

It might be the result of a brutally cold winter so far but Canadian consumer spending dipped in January, according to the latest spending tracker from RBC.Using cardholder data, Canada's largest bank indicated that spending fell across discretionary goods, services and essentials in the month.The bank downplayed the decline, noting that it came after a particularly strong December.December had been an especially strong for goods tied to holiday shopping, and January largely retraced some of those earlier gains. The reversal points to a normalization following elevated year-end spending rather than a sudden deterioration in household demand.Essentials spending also declined in January, extending softer tone already evident from late 2025. By contrast, discretionary services spending edged lower, but remained the most resilient of the three major groupingsThe bank also cited severe winter weather noting that spending fell in Ontario on peak storm days. Another soft area was housing-related spending in light of the persistent slide in housing prices in much of the country.RBC demonstrated the storm related dips: This article was written by Adam Button at investinglive.com.

Prior was +2.7%m/m CPI +0.2% vs +0.3% expected Prior m/m reading was +0.3%Real weekly earnings +0.5% vs -0.3% prior (revised to -0.5%)Core inflation :Ex food and energy +2.5% vs +2.5% y/y expectedPrior ex food and energy +2.5%Core m/m +0.3% vs +0.3% exp Prior core m/m +0.2%Core goods +1.1%Core services +2.9% y/ySupercore +2.7% y/yUnrounded numbers:Core +0.281% m/m seasonally adjusted, +0.437% NSAThere has been a slight dovish shift in Fed pricing following the data and we can see that in a softer US dollar as well. S&P 500 futures are now flat, erasing the earlier decline.Notably, October CPI data was not collected due to a government shutdown, and November data collection began later than usual, capturing more seasonal holiday discounting. Economists widely cautioned that these disruptions may have artificially depressed the readings. Meat prices were a standout concern, soaring 8.9% annually — the sharpest increase since 2022 — with raw ground beef up nearly 15%. While the cooler-than-expected report was welcomed by markets and supported the case for continued Fed rate cuts, analysts stressed that the December report would provide a clearer picture of underlying inflation trends.On a two-month basis (September to November), the all items index rose 0.2% seasonally adjusted, with core CPI also up 0.2% over that span, implying roughly 0.1% monthly readings for both October and November. Shelter costs, typically one of the stickiest inflation components, rose just 0.2% over the two-month period, slowing sharply from a 3.6% annual pace in September to 3.0% in November. Food prices increased 2.6% annually, down from 3.1% in September, while the energy index jumped 4.2% year-over-year, driven by a 6.9% surge in electricity costs.The Bureau of Labor Statistics reported that the Consumer Price Index for All Urban Consumers (CPI-U) rose 2.7% on an annual basis in November 2025, a notable deceleration from the 3.0% pace recorded in September. Core CPI, which strips out volatile food and energy costs, increased 2.6% year-over-year — its lowest reading since March 2021. This article was written by Adam Button at investinglive.com.

It's a mixed up week with non-farm payrolls already passed but CPI scheduled for today. It's a big one as it could re-frame the debate about how many rate cuts are possible. Notably, despite the strong non-farm payrolls on Wednesday, the market isn't convinced the Fed will hold. Year-end pricing for rate cuts is up to 59 bps from 48 bps last week.I think the shift in pricing is more-reflective of what's been happening in stock markets as AI disruption is priced in, particularly in software stocks. The market might be looking at layoffs, economic disruption and multiple contraction. The Fed has been responsive to equity declines in the past, for better or worse.On CPI, the headline is expected to rise +0.3% m/m and 2.5% y/y. Core is also seen at +0.3% and +2.5%.We have some great previews on the report:What is the distribution of forecasts for the US CPI?This one notes that there is somewhat of a skew towards a higher y/y reading in core and headline.US January CPI report to offer a cleaner read on inflation developments?From Justin:As always, the focus will stay on core prices when taking in the report as a whole. And if the annual estimate continues to keep in the middle range between 2% to 3%, it will be tough to see the Fed taking on a much more dovish stance than what they are sticking with currently.In another note:JPMorgan’s US Market Intelligence desk said weaker retail sales and high-frequency indicators have increased the importance of the CPI release, adding that a hawkish CPI print is more likely than a dovish outcome, but does not expect a strong market reaction to a stagflationary reading.Here is the chart: This article was written by Adam Button at investinglive.com.