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cover of episode After Monday Rally, Market Awaits Powell, CPI

After Monday Rally, Market Awaits Powell, CPI

2025/2/11
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Colin Martin
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Keith Lansford
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Michelle Gibley
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Keith Lansford: 我认为市场目前最关注的是美联储主席鲍威尔在国会的证词以及即将公布的消费者价格指数(CPI)。这些数据将直接影响市场对未来利率走向的预期。此前,美国国债收益率已跌至六周低点,因此,市场参与者都在密切关注鲍威尔的讲话,希望能从中找到关于美联储货币政策的线索。 Colin Martin: 我分析认为,美国国债收益率的风险偏向上行,特别是10年期国债收益率,很有可能重新测试5%的水平。近期公布的就业报告显示劳动力市场依然强劲,经济也以2.5%至3%的速度增长。在这种背景下,我认为美联储短期内不太可能再次降息,这将对短期收益率形成支撑。长期来看,收益率可能会在4.5%至5%的区间内波动,特朗普的政策也可能推高通胀,从而拉高长期收益率。 Michelle Gibley: 我建议投资者在面对关税消息时保持谨慎。虽然贸易紧张局势可能会加剧,但试图根据每一次关税声明进行交易是充满风险的。我认为投资者应该采取更长远的视角,关注贸易政策对经济的长期影响,而不是短期的市场波动。

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This chapter analyzes the upcoming testimony of Federal Reserve Chairman Jerome Powell and its potential impact on interest rates and inflation, considering recent economic data and market trends. The discussion includes the implications of the January CPI report and the ongoing effects of government policies.
  • Powell's testimony and the January CPI report are key events impacting rates and inflation.
  • Treasury yields fell to six-week lows, and the 10-year Treasury yield is around 4.5%.
  • The strong labor market and economic growth are influencing the Fed's decisions on rate cuts.
  • January CPI is expected to show 0.3% headline and core inflation monthly growth.
  • Inflation expectations are rising, despite the New York Fed's report showing a stable headline reading.

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Welcome to the Schwab Market Update podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Tuesday, February 11th.

Federal Reserve Chairman Jerome Powell's semi-annual monetary testimony to Congress today and the Consumer Price Index, or CPI, Wednesday puts rates and inflation firmly in the driver's seat after Treasury yields fell to six-week lows a week ago. Powell's testimony comes after the benchmark 10-year Treasury yield barely moved Monday following mixed debt on inflation expectations.

It rose one basis point to 4.49% and 4.5% seems like an inflection point. Risks to Treasury yields are tilted towards the upside, with a 10-year Treasury yield possibly retesting the 5% area, said Colin Martin, director of fixed income strategy at the Schwab Center for Financial Research. Last week's jobs report highlighted that the labor market remains relatively strong and the economy continues to grow at a 2.5% to 3% rate.

With inflation sticky and a strong economic backdrop, the Fed likely won't cut rates again anytime soon, likely putting a floor on short-term yields for the time being. Martin added long-term yields should continue to trade in a 4.5% to 5% range, as Trump's proposed policies could keep inflation elevated or even pull it higher, potentially pulling up long-term yields.

CPI due Wednesday before the open is expected to show a 0.3% headline and core inflation monthly growth in January, with core stripping out volatile food and energy prices. The figures for December were 0.4% and 0.2%.

The full-year inflation growth numbers are also going to be in the spotlight, with analysts building in 2.9% headline and 3.1% core. That compares with 3.2% core and 2.9% headline in December.

The expected monthly core increase to 0.3% from 0.2% would indicate that while inflation isn't re-accelerating, it's also not fully tamed. And last week's consumer sentiment data showed inflation expectations on the rise. However, Monday's U.S. Consumer Inflation Expectations Report from the New York Fed showed the headline reading at 3% for the year ahead, unchanged from a month earlier.

This may have given the market a slight lift, even as tariff worries continue to percolate. Even so, the market appears to be digesting tariff news well, though it has been relatively range-bound the last few months, and the dollar and gold both surged again Monday. Gold has been setting record highs almost every day this month amid global policy and economic uncertainty.

President Trump pledged he'd impose tariffs on imports of steel and aluminum after tit-for-tat tariffs with China hurt stocks last week. Trade tensions tend to raise volatility. Tariffs may rise, but trying to trade every announcement is fraught with risk, said Michelle Gibley, director of international research at the Schwab Center for Financial Research. Investors might want to keep a longer-term perspective.

Lyft, Coca-Cola, and Humana are expected to report Tuesday. Earnings later this week include Cisco, Roku, Coinbase, Palo Alto Networks, and Applied Materials. Lyft is teaming up with Mobileye on robo-taxis and plans to launch them as soon as next year, while Coca-Cola saw volume declines in its third quarter. Investors await the beverage company's initial fiscal 2025 guidance.

Several Treasury auctions this week, including a three-year note auction today and a 10-year note auction tomorrow, could help set direction for yields. However, Powell may also have an impact, with investors likely listening closely for any insight on rate policy, jobs, and inflation. The market keeps dialing down near-term rate cut ideas, with the CME FedWatch tool now showing just 6.5% odds for March, down from 30% a couple of weeks ago.

Generally strong economic data, along with government policy uncertainty, will likely keep the Fed on pause next month. Futures trading still builds in hopes of one to two rate cuts later this year. Powell's testimony today in the Senate and tomorrow in the House might have an impact on those odds, but Powell would likely have to depart dramatically from his post-Fed meeting comments of last month to really shift the landscape.

Back then, Powell made clear he felt rates were in a good place, balanced between the Fed's dual-mandate goals of maximum employment and price stability. In Sector Action Monday, semiconductors bounced back from recent weakness led by Broadcom, Micron, Intel, and NVIDIA as buyers re-embraced many tech shares they moved away from earlier this year.

The PHLX Semiconductor Index, or SOX, remains well below last month's highs, but is back in the green for 2025, helped by recent news of more big spending plans by Alphabet, Meta, and Amazon. According to Bloomberg, some hedge funds that had taken short positions betting against the market early this year are back into long ones that display optimism for Infotech and materials stocks.

Though Infotech enjoyed a nice jump yesterday, energy led all sectors as crude oil jumped back above its 50-day moving average of just above $72 a barrel and for falling steadily since mid-January. Almost every S&P 500 sector climbed yesterday, but financials struggled, hurt in part by weakness in Bank of America, as Barron's reported that Berkshire Hathaway might be selling shares of the company.

Retail stocks generally had a solid Monday as names like Uber, Foot Locker, McDonald's and Nike all climbed 3% or more.

The S&P 500 index rose 40.45 points Monday, or 0.67%, to 6,066.44. The Dow Jones Industrial Average climbed 167.01 points, or 0.38%, to 44,470.41. And the Nasdaq Composite added 190.87 points, or 0.98%, to 19,714.27.

This has been the Schwab Market Update podcast. To stay informed, visit www.schwab.com slash market update or follow us for free in your favorite podcasting app. And if you like what you've heard, please consider leaving us a rating or a review. It really helps new listeners find the show. Join us for another update tomorrow. For important disclosures, see the show notes and schwab.com slash market update podcast.