US stocks are falling despite gentle inflation, and Powell’s speech was expected

Shares saw little movement on Tuesday, with the Dow DJIA,
+ 0.05%
and S&P 500 SPX,
-0.15%
posting small losses to achieve a six-day winning streak for both indices, while the Nasdaq Composite COMP,
-0.24%
made a small profit to capture another nearby record. The Russell 2000 RUT small cap
-0.18%
it outperformed its larger-headed brethren with a gain of 0.4% to post another record as well.

See: Will the stock market have to make a correction in 2021? This is what some experts think

What is driving the market?

Investors continue to focus on the prospects of another major round of government spending, as well as a slow pace of new COVID-19 infections, along with the ongoing deployment of vaccines. At the same time, market observers are analyzing January consumer price inflation data released Wednesday morning.

The U.S. consumer price index rose 0.3% in January, as expected, after rising 0.4% a month earlier, but excluding volatile food and energy prices, the core CPI remained unchanged against a projected increase of 0.1%. CPI inflation rose by 1.4% in the last twelve months.

While key economic indicators still show no evidence of inflation, commodity prices are, said Andrew Smith, chief investment strategist at Dallas-based Delos Capital Advisors. Raw materials such as oil CL.1,
+ 0.74%,
wooden wood,
+ 1.03%,
and C00 corn,
-2.97%
they’ve all shot up more in recent months and maybe they’ll start pinching the pocket books of Americans soon, he said.

Still, Smith told MarketWatch, “We think we’ve got a new step in the market.” While valuations are high in every corner of the market, “we are finally seeing profit growth,” he said.

In a separate report, the Census Bureau said wholesale inventories gained 0.3% in December.

“Investors are already trying to avoid it when the U.S. economy experiences the overcoming of inflation that is expected to be driven by more incoming fiscal stimulus,” Han Tan, FXTM market analyst, said in a note.

“These conditions could trigger the Fed’s tight cut, which could pave the way for higher interest rates. More clues about this timing would help global investors determine their equity and bond allocations,” he said.

Investors were expected to pay little attention to Donald Trump’s second impeachment trial, with arguments slated to begin in the Senate on Wednesday afternoon. The Senate voted Tuesday that the process could continue after a round of arguments over the constitutionality of judging a former president.

The trial is not expected to affect financial markets, as it is not seen to interfere with a push toward another round of spending on coronavirus aid. President Joe Biden aims for a $ 1.9 trillion package and Congress Democrats have taken steps that would allow them to push through a spending plan without Republican support in the uniformly divided Senate through a process known as budget reconciliation. . However, the size of the plan is expected to decline slightly, due to resistance from some Democrats.

Powell is scheduled to make statements to the New York Economic Club at 2 p.m. in the East, and the federal budget figures for January will be released at 2 p.m.

See: 24 bank shares with dividends of at least 3.57%, three times what ten-year treasuries pay

Which companies are concentrated?

• Actions of Coca-Cola Co.
  KO,
  + 0.03%
  it rose 0.3% after delivering revenue and earnings Wednesday morning that exceeded Wall Street expectations.

• Actions of Twitter Inc.
  TWTR,
  + 7.52%
  rose at noon after the social media platform delivered the second quarter of $ 1 billion on Tuesday afternoon.

• Cisco Systems Inc.
  CSCO,
  -3.92%
  on Tuesday afternoon it reported quarterly results that exceeded Wall Street estimates, although sales in certain segments fell short of expectations. Shares of the manufacturer of network services, video conferencing tools and security software fell 4.1%.

• Mattel Inc.
  RUG,
  -2.81%
  shares fell 3.4%, even after the toy maker exceeded Wall Street expectations for its fourth quarter and said it remained “aware” of the “volatility and other macroeconomic uncertainties” related to the COVID.

• Actions of Yelp Inc.
  YELP,
  -6.62%
  It also reversed early gains to a nearly 7% drop, despite Tuesday’s better-than-expected sales and earnings on Tuesday.

• In the news about offers, shares of NIC Inc.
  EGOV,
  + 16.14%
  jumped 16.2% after the digital government payments and solutions company agreed to be acquired by Tyler Technologies Inc.
  BACK,
  + 7.14%
  in a $ 2.3 billion cash deal.

What do other markets do?

• The performance of the 10-year Treasury note TMUBMUSD10Y,
  1.137%
  it slipped around 2 basis points to about 1.140%, having seen a key threshold of 1.2% before. Bond yields and prices are moving in opposite directions.

• The US Dollar Index ICE, DXY,
  -0.13%
  a measure of the currency against a basket of six main rivals, fell 0.1%, to about 90.38.

• Futures on oil rose in bewildering trade, after a report showed lower stocks, with the US benchmark CL.1,
  + 0.74%
  0.6% to $ 58.71 a barrel. GC00 Gold Futures,
  + 0.33%
  they were 0.2% higher, about $ 1,839 an ounce.

• The Stoxx 600 Europe SXXP pan-European index,
  -0.23%
  lost 0.2% and the FTSE 100 UKX in London,
  -0.11%
  fell 0.1%.

• In Asia, the Shanghai Composite SHCOMP,
  + 1.43%
  closed up 1.4%, while Hong Kong’s Hang Seng HSI index,
  + 1.91%
  increased 1.9% and the Japanese Nikkei 225 NIK,
  + 0.19%
  increased by 0.2%.

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