🔥 CPI came in hot, incinerating gains

🥊 But Bitcoin remains undefeated

I’m going to be in Mexico next week hosting our investor field trip, so these notes may come out slightly later in the morning than usual.

There’s still one spot left if you fancy a last-minute journey.

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📰 Market Headlines

*past 24-hour performance

  • Hot CPI data knocked everything down a notch yesterday. January's CPI showed a 3.1% increase, above the 2.9% expected by analysts.

    • Kalshi nailed the prediction, as did we. 🎉 

  • The S&P 500 dropped 1.4% and fell below 5,000, marking its worst CPI announcement day performance since 2022.

  • The Dow Jones was down over 500 points, its largest decline since last March.

  • Bitcoin dipped below $50k briefly but is back above $51k this morning.

  • U.S. Treasury yields shot up with the 10-year note hitting its highest level since late November.

🕶️ Market Vibes

🎰 Market Forecasts and Futures

The likelihood of a rate cut in March is now microscopic, according to Kalshi, though traders are still pricing in an 8.5% chance.

So let’s push out to May, where traders are saying there’s a 36% chance now vs 33% at Kalshi.

😱 Fear and Greed Index

🧠 What do you think?

This newsletter has correctly called both the January Jobs numbers and CPI and gave you the playbook to cash in via Kalshi. I hope you’ve made some money!

💵 Have you taken advantage of the free money on Kalshi?

(Remember, you get $25 free)

Login or Subscribe to participate in polls.

🎤 What you said last time

The 2.9% to 3.1% bracket got the most votes and correctly predicted yesterday’s data. Congrats, you are all professional economic analysts now.

2.9% - 3.1%

“No rate cut”

3.2%+

“I think numbers will come in higher than expected...energy costs.”

“We tend to be very optimistic and greedy... And then what happens happens...”

📈 Trends you need to know

Search results are from our friends at Glimpse, my favorite way to spot trends.

Companies are cutting back on in-house entrepreneurship as belts get tighter.

📊 Stocks

Want to invest like Buffet? With Public.com, you can emulate Berkshire Hathaway’s portfolio with just a few clicks.

Winners and losers

Earnings, upgrades, and acquisitions

  • Waste Management bucked the market and shot up 11% after reporting record revenue of $5.2 billion.

  • Coca-Cola boosted revenue by 7% to $10.8 billion in Q4, but the stock stayed stable.

  • Shopify shares tumbled 13.4% after issuing weaker-than-expected Q1 guidance despite a 23% increase in gross merchandise volume.

  • Airbnb had a Q4 net loss of $349 million, down 2%

  • Hasbro shares dropped 1.3% after missing Q4 revenue expectations and forecasting a 7-12% decline in consumer products segment revenue for 2024.

  • An accidental extra zero in Lyft's earnings report shot shares up 44% in after-hours trading, before dropping way back down to just an 18% gain.

  • Restaurant Brands International exceeded Q4 earnings and revenue estimates. Shares were still down 4%.

  • Sony beat profit and raised guidance, sending shares up 4% after hours. PS5 sales forecasts were cut, though.

Market movers

  • The U.S. is back on top of the Fortune Global 500 with 136 of the top 500 global companies vs China's 135.

  • SpaceX got fined $3,600 after a worker nearly lost a limb. [Ed: this seems obscenely low?]

  • Paramount Global is cutting 800 jobs despite a Super Bowl-driven ad revenue spike.

  • 2024 has seen over 100,000 job cuts, a 15-year high, with Twitch, Hasbro, and Spotify leading the reductions.

  • Investor optimism hit a two-year peak, buoyed by hopes for a soft economic landing. [Ed: this may be slightly dated given the decreased Fear and Greed Index above]

  • Microsoft Copilot is getting mixed reviews, weighing on Microsoft’s AI boom.

Ideas, trends, and analysis

🌍 Global Perspectives

  • 🇲🇽🇺🇸 Mexico surpassed China as the US's top trading partner in 2023, with $798 billion in bilateral trade.

  • 🇾🇪🇮🇷 Houthi forces in Yemen attacked an Iran-bound grain ship in the Red Sea, their first such assault in six days.

  • 🇱🇧🇮🇱 Hezbollah leader Hassan Nasrallah declared that cross-border attacks from Lebanon into Israel would stop only with a Gaza ceasefire.

  • UK inflation held steady at 4%, coming in cooler than expected. But it’s not all tea and cream - Goldman says Brexit has shaved 5% off the country’s economy.

📊 Income

  • Should you pick Nvidia or Meta for tech dividends?

  • Data shows the Dow Jones Dividend 100 Index subset consistently outperformed the broader index.

  • This REIT focuses on leases to industry-leading stable tenants like Starbucks & Target and yields a dividend of 5.2%.

📊 Crypto

🧠 Errata

  • A small plane's door just popped off over Buffalo New York.

    • Boeing execs experienced maximum schadenfreude.

  • A Rhode Island hiker won a fight to the death with a rabid coyote.

  • Self-driving cars have turned into self-delaying cars due to endless tech hurdles.

  • Booze is on a diet. Drinks are getting weaker worldwide thanks to changing tastes and tight budgets.

  • An Oregon resident caught the bubonic plague from her cat.

📺 What to Watch Today

That’s all for today. Did I miss anything? Smash the reply button to let me know.

Cheers,

Wyatt

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