U.S. Indices were mixed on Friday, with the Russell 2000 outperforming, which rallied 1.2%. The equal-weight ETF also saw strong gains while the majority of sectors were green too, showing strong breadth with the heavy-weight sectors (Comms, Tech and Consumer Disc) weighing on broader index performance. The highlight of the session was the CPI report, which ultimately came in softer than expected on the headline, while core was in line with forecasts. Goods prices were supportive of the view that tariff-induced inflation is largely behind us, but services inflation continued to accelerate, which gave Fed’s Goolsbee some concerns. T-notes were firmer across the curve in response to the inflation data, with the front end leading, seeing the curve bull steepen. In FX, Sterling outperformed while the Australian Dollar lagged, with price action elsewhere rather tame. Crude prices settled flat to slightly firmer, with crude paring the immediate downside after OPEC surveys revealed the bloc is leaning towards resuming output hikes from April. US-China relations were in the limelight after the Pentagon added a plethora of Chinese companies to a list accused of aiding the Chinese military, although this list was later removed. Gold and Silver prices saw further gains alongside Bitcoin. The January CPI report leant soft. The headline rose 0.171%, beneath the 0.3% forecast and cooling from the prior 0.298%. The Y/Y rose 2.4%, below the 2.5% forecast and dropping from the 2.7% read in December. The core metrics were in line with expectations. Headline core inflation rose 0.295% M/M, up slightly from the 0.233% in December, with the Y/Y rising 2.5%, down from the prior 2.6%. Within the report, core goods inflation was almost non-existent again (0.04% vs prior 0.03%), with core services accelerating to 0.39% from 0.27%. The supercore print rose to 0.58% from 0.23%, however. Oxford Economics highlights that the data reinforce their view that tariff-induced price increases on the goods side are largely behind us. The desk’s preliminary estimate for headline and core PCE is 0.19% and 0.265%, respectively, for January. It says the data is welcome news for the Fed, but it does not change its baseline forecast for monetary policy based on one inflation reading. “Lingering distortions from the shutdown in the price data, prospects for solid growth this year, and a stabilising job market will keep the central bank on hold until June.” Fed Member Goolsbee said we are still seeing pretty high services inflation, which is worrisome, and it was not tame in the CPI data. Goolsbee continued to argue that rates can still go down, but needs to see progress on inflation, which he believes is not on a path back to 2% inflation but stuck around 3%. “If we’re at 2% inflation, we can have several more cuts.” He did note that the CPI data had encouraging bits as well. The Chicago Fed President noted that the job market has been steady, with only a modest cooling. He does not know how restrictive Fed policy is, and consumers should hold in if the job market is stable and inflation eases. Goolsbee reiterated his dissent at the December meeting (wanted to hold vs cut), “Would have been wiser to wait in December 2025”. Elsewhere, Oil closed lower by 0.25% while Gold reversed most of Thursday’s aggressive sell-off with a gain of 2% on Friday.
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For anyone following my Platinum Service it made 660 points on Friday and is now ahead by 4667 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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