Market Review February 13, 2024

On February 13, 2024, important economic data were released, including the Consumer Price Index (CPI) and Core CPI for January, as well as the API Weekly Crude Oil Stock. The CPI increased by 0.3% month-over-month, slightly above the forecast of 0.2%, indicating rising consumer prices. The annual CPI came in at 3.1%, a reduction from the previous 3.4% but above the expected 2.9%, suggesting persistent inflationary pressures. The Core CPI, which excludes volatile food and energy prices, rose by 0.4% month-over-month and 3.9% year-over-year, both figures exceeding forecasts and underscoring an uptick in underlying inflation. Additionally, the OPEC released its monthly report, providing insights into global oil market trends.

Impact on USD

The higher-than-expected CPI and Core CPI are likely to strengthen the USD as they could signal the Federal Reserve to consider tightening monetary policy to combat inflation. Such expectations typically boost the dollar as investors anticipate higher interest rates.

Impact on Gold

The data indicating persistent inflation could increase the appeal of gold as an inflation hedge. As inflationary concerns mount, investors often turn to gold, driving up its price. The specifics of the OPEC report could also influence gold prices, especially if global energy market dynamics are seen as potentially inflationary.

Impact on Equity Futures

The equity markets might react negatively to the higher-than-expected inflation data. Increased inflation often leads to fears of higher interest rates, which can dampen corporate profitability and reduce the attractiveness of stocks. However, sectors that benefit from inflation, like energy, might see some gains, especially in light of the significant increase in the API Weekly Crude Oil Stock.

The data from February 13 suggests that inflation remains a concern, with potential implications for the Federal Reserve's policy decisions. The ongoing adjustments in crude oil stocks and the insights from the OPEC report will further guide market sentiments, especially concerning energy stocks and inflation-sensitive sectors.