US shares fall despite tame inflation, with speech by Powell

Stocks moved little on Tuesday, with the Dow DJIA,
+ 0.05%
and S&P 500 SPX,
-0.11%
place small losses to get a six-day winning streak for both indices, while the Nasdaq Composite COMP,
-0.16%
got a small profit to achieve another record. The smallpox Russell 2000 RUT,
-0.11%
surpassed its larger siblings by a 0.4% increase to also achieve another record finish.

See: Should the stock market be corrected in 2021? Here’s what some experts think

What drives the market?

Investors remain focused on prospects for another major round of government spending, as well as a slowdown in new COVID-19 infections, coupled with the ongoing explosion of vaccines. At the same time, market viewers are judging the consumer price inflation data for January published on Wednesday morning.

The US consumer price index rose 0.3% in January, as expected, after rising 0.4% a month earlier, but excluding fluctuating food and energy prices, the core CPI remained unchanged from an expected increase of 0.1%. CPI inflation has risen by 1.4% over the past 12 months.

Although the major economic indicators do not yet show any evidence of inflation, commodity prices are, says Andrew Smith, chief investment strategist at Delos Capital Advisors, Dallas. Raw materials such as oil CL.1,
+ 0.67%,
wood WOOD,
+ 1.03%,
and wheat C00,
-3.06%
has all shot higher in the past few months, and may soon start pinching Americans’ pocket books, he said.

Nevertheless, Smith told MarketWatch: “We think we have made good new progress in the market.” While valuations are high in all corners of the market, ‘he has finally seen profit growth’, he said.

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

“Investors are already trying to anticipate when the US economy will experience the inflation overrun that is expected to result from more incoming fiscal stimulus,” FXTM market analyst Han Tan said in a note.

‘Such conditions could cause the much-discussed Fed weakening, which could then pave the way for higher interest rates. “More leads over the timeline will help global investors determine their equities against equities,” he said.

Investors were expected to pay little attention to the second indictment over Donald Trump, with arguments set to begin in the Senate on Wednesday afternoon. The Senate on Tuesday voted that the trial could proceed after a round of arguments over the constitutionality of the trial of a former president.

The trial is not expected to affect the financial markets as it is not seen as a push towards another round of spending on coronavirus. President Joe Biden is targeting a $ 1.9 billion package and Congress Democrats have taken steps to push them through a process known as budget reconciliation, a spending plan without Republican support in the proportionate Senate pressure. The size of the plan is expected to shrink somewhat due to resistance from some Democrats.

Powell is expected to make Eastern remarks to the New York Economic Club at 2 p.m., and the federal budget figures for January will be announced at 2 p.m.

See: 24 bank shares with a dividend of at least 3.57%, three times more than 10-year Treasurys

Which companies are in focus?

• Shares of Coca-Cola Co.
  KO,
  + 0.01%
  cost 0.3% higher after delivering revenue and revenue that exceeded Wall Street expectations on Wednesday morning.

• Shares of Twitter Inc.
  TWTR,
  + 8.02%
  rose yesterday afternoon after the social media platform delivered its second quarter of $ 1 billion late Tuesday.

• Cisco Systems Inc.
  CSCO,
  -3.78%
  late Tuesday, the quarterly results reached the Wall Street estimate, although sales in certain segments came below expectations. The shares of the network service provider, video conferencing tools and security software decreased by 4.1%.

• Mattel Inc.
  MAT,
  -2.17%
  Shares fell 3.4%, even after the toy maker exceeded Wall Street expectations for its fourth quarter, saying it was still “aware of COVID-related” volatility and other macroeconomic uncertainties. ”

• Shares of Yelp Inc.
  JELP,
  -6.47%
  also turned early profits to tumble nearly 7% despite sales and earnings being reported better than expected on Tuesday.

• In deal news, shares of NIC Inc.
  EGOV,
  + 16.07%
  jumped 16.2% after the digital government solution and payment company agreed to acquire through Tyler Technologies Ing.
  TYL,
  + 6.95%
  in a $ 2.3 billion cash deal.

What are other markets doing?

• The yield on the 10-year treasury note TMUBMUSD10Y,
  1,137%
  slipped about 2 basis points to about 1,140%, after previously seeing a key threshold at 1.2%. Yields and bond prices are moving in opposite directions.

• The ICE US Dollar Index, DXY,
  -0.11%
  a measure of the currency against a basket of six major competitors, fell by 0.1% to about 90.38.

• Oil futures have risen in awkward trading, following a report showing lower stocks, with the US benchmark CL.1,
  + 0.67%
  0.6% higher to $ 58.71 a barrel. Gold futures GC00,
  + 0.29%
  was 0.2% higher, near $ 1,839 per ounce.

• The pan-European Stoxx 600 Europe Index SXXP,
  -0.23%
  shed 0.2% and London’s FTSE 100 UKX,
  -0.11%
  0.1% decreased.

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

Read the following: According to Raymond James, these ‘sweet sixteen’ recovery stocks still have their head