Rebounding.

US stocks finished higher on Tuesday as February consumer inflation comes in-line with expectations. ?

?? DJIA +1.05%, S&P500 +1.68%, NASDAQ +2.14% ?

Markets breathed a sigh of relief on Tuesday, rallying into the close but off session highs. Intraday gains slipped after a US military drone collided with a Russian fighter jet in international airspace, according to reports.

Overall, markets held up pretty well as investors digested the release of the Consumer Price Index (CPI) and the aftermath of regional bank failures.

Financial stocks plummeted over the past few sessions as fears of contagion spread on the news of Silicon Valley Bank and Signature bank failing. In Tuesday’s session, financials surged as confidence in the banking sector improved.

Consumer inflation data as reflected in CPI, showed inflation dropping in February to the lowest level since September 2021 at an annualized rate of 6%. Core CPI, which excludes energy and food costs, came in slightly lower than the previous print at 5.5% YoY. While the report came primarily in-line with expectations, the monthly core figure was slightly higher—0.5% versus forecasts of 0.4%.??????

All data leads to the Fed, and today’s CPI was no different. Treasury yields fluctuated but rose after plummeting on Monday. The policy-sensitive 2YR yield recovered lost ground as inflation is still relatively strong, but coming down. So far, expectations for a 25 bps hike at the Federal Reserve’s next policy meeting are firm.

With two-sessions behind us this week, investors will look ahead to more Fed sensitive data. Wednesday is slated to feature retail sales, which is expected to come in substantially lower than January’s print, and wholesale inflation from the Producer Price Index.

We continue to remain positive and are looking for opportunities amid volatility.??

?? Today’s Market Dashboard

Market Overview

• US YIELDS: 2YR +0.202, 4.232% / 10YR +0.153, 3.668% / 30YR +0.121, 3.788%. at 4 PM EDT
• US DOLLAR INDEX 103.58, -0.02% at 4 PM EDT
• VIX Cboe Volatility Index 23.69, -10.67% at 4 PM EDT
• WTI CRUDE OIL -4.64%, settles at $71.33/bbl

Economic Data

• Consumer Price Index (CPI) (Feb): 6.0% YoY / 0.4% MoM, Forecast: 6.0% YoY / 0.4% MoM, Prior: 6.4% YoY / 0.5% MoM.
• Core CPI (Feb): 5.5% YoY / 0.5% MoM, F: 5.5% YoY / 0.4% MoM, P: 5.6% YoY / 0.4% MoM
• NFIB Small Business Optimism (Feb): 90.9, P: 90.3????

Geopolitical Headlines

• U.S. Military Drone Downed After Being Hit By Russian Aircraft Over Black Sea, Air Force Says (RFE/RL)
• China’s Xi to meet Putin in Moscow, speak to Zelenskyy: reports (POLITICO)
• North Korea Fires 2 SRBMs as US, South Korea Conduct Military Drills (The Diplomat)
• OPEC raises Chinese oil demand growth forecast further (ARAB NEWS)
• China Plans New Middle East Summit as Diplomatic Role Takes Shape (WSJ – March 12)
• U.S. Skeptical of Middle East Deal Brokered by Beijing (WSJ – March 13)
• Biden administration approves controversial Alaskan oil project (POLITICO)
• U.S. to sell nuke-powered subs to Australia in unprecedented deal (POLITICO)
• Chinese Start-Ups Hunt for ‘Friendly’ Banks to Park SVB Funds (Asia Financial)
• India to Discourage Foreign Trade Settlement in Chinese Yuan (Asia Financial)
• Pakistan's Ex-PM Khan Leads Rally, Ignores Arrest Warrants (RFE/RL)

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INVESTMENT ADVICE.?

?? SOURCES: MarketWatch, Investing.com, Reuters, CNBC

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MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through Quantitative Market Data Analysis.

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