US opening: high inflation puts pressure on stock indices🔔

• Inflation in the US is higher than forecast
• The dollar strengthens, yields rise
• American indices lose at opening

The US inflation report did not disappoint and once again brought a strong dose of volatility to the market, this time unfortunately causing a decline. US inflation is much higher than expected. As a result, we are seeing a dynamic pullback in the stock markets: the US500 index drops below 5,000 points. The dollar is strengthening and is the strongest currency among the G10 currencies. Longer term, post-release, there is still no attempt to recover some of the losses for EURUSD, which is currently down 0.50% at 1.07150. US Treasury yields rose to 4.27%.

CPI report details

Although the data beat analysts’ expectations, we still saw a year-on-year decline in January to 3.1% year-on-year, down from 3.4% year-on-year in December. However, analysts’ expectations showed that the figure would be 2.9% year on year.
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Immediately after the release, market expectations for the Fed’s first rate cut fell to just under 100 basis points in 2024, down from 125 basis points before the report. Thus, the first interest rate reduction has been postponed from June to July, and a possible reduction in May has already been practically ruled out.

Corporate news

Microsoft Testers (MSFT.US) Copilot’s new artificial intelligence software for Microsoft 365 has proven useful, but isn’t always worth the price, according to The Wall Street Journal. This tool, which integrates with Word, Outlook and Teams, offers features such as text generation and email digests, but has limitations, especially in Excel and PowerPoint. Some testers, including Juniper Networks, question the $30 per user value due to these shortcomings and occasional inaccuracies such as generating incorrect meeting summaries. Despite this, Microsoft saw unprecedented early demand for Copilot.

JetBlue (JBLU.US)The company’s shares rose 13% after activist investor Carl Icahn reported a significant 9.91% stake in the airline, equivalent to 33.6 million shares worth $204.1 million.

Waste Management (WM.US) rose 3.70% after announcing better-than-expected results. Company management projects revenue growth of 6% to 7% in fiscal 2024 and expects adjusted operating earnings before interest, taxes, depreciation and amortization to be between $6.28 billion and $6.43 billion.

ZoomInfo Technologies (ZI.US) rose 10% following the release of fourth-quarter results that beat consensus estimates and provided a positive outlook. They expect first-quarter GAAP revenue to be between $307 million and $310 million and non-GAAP adjusted earnings per share to be between $0.23 and $0.24. For fiscal 2024, the company expects GAAP revenue to be between $1.26 billion and $1.28 billion and adjusted earnings per share to be between $0.99 and $1.01.

Brighthouse Financial (BHF.US) saw a sharp 14% decline following weaker-than-expected fourth-quarter results, with annuity sales down 15% year-over-year. CEO Eric Steigerwalt attributed the decline to a new legal requirement regarding reserves and required capital, which negatively impacted the company’s overall adjusted capital but also reduced required capital.

Shopify (SHOP.US) fell 10% despite slightly beating consensus expectations in the fourth quarter, with gross sales up 23% and revenue up 24%. Looking ahead, Shopify expects revenue growth to be in the mid-twenty percent range year-over-year, or in the mid-to-twenty percent range when adjusted for the impact of the sale of its logistics business.
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