Stock Market Update Tuesday February 13, 2024 A hotter-than-expected reading of January CPI spurred all sorts of asset price indigestion, This morning's CPI report caused chaos everywhere when inflation didn't decline as much as expected, even though it was only a tick higher than forecast. The whole fantasy that inflation has become contained is, of course, just that. Although just looking at the surface of the problem, the rate at which prices are increasing has softened quite a bit. But that has done nothing to change the underlying high prices in general that people are experiencing.
In the afternoon, a rebound emerged following the initial stabilization of the slide. However, this rally quickly unraveled, and the underlying selling pressure intensified, resulting in all indices experiencing losses exceeding 2% at the close stocks slumped to the tune of 1.6% on the Nasdaq 100, S&P500 closed at 1.37% while the small-cap Russell 2000 lost 4.1%. Yesterday's surge in the Russell 2000 proved short-lived, as the index experienced a rapid 3% decline. This suggests that the narrowing of the rally may signal its end, rather than an impending broadening out, with large-cap stocks being sold off while smaller-cap stocks are being favored.
Away From Stocks: Two-year yields surged 18 basis points to 4.64%, with the 10-year reaching 4.31%, well above the 4.09% auction print from last Thursday. WTI crude advanced to near $78 a barrel, and gold sank to $1,992 per ounce. The VIX rose by two points to near 16 after testing the 18 handle in mid-afternoon.
