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Volatility Returns on Mixed Economic Data


Today's financial recap and tomorrow's financial outlook.

The Consumer Price Index fell 0.7% in January, the largest decline since December 2008 as gasoline prices dropped.

The Core CPI, which excludes volatile food and energy prices, rose 0.2%, ahead of the 0.1% expected.

James Bullard, President of the St. Louis Fed, said in a CNBC interview that the data was supportive of a Federal Reserve interest rate hike.

The US dollar reversed recent losses and traded up against the euro and yen. That sent oil prices sharply lower, with crude oil falling over 4%. US Treasury yields rose 5 bps.

Durable Goods Orders rose 2.8% in January, exceeding the 1.6% consensus forecast due to strong aircraft order activity.

Excluding transportation, orders rose 0.3% vs. the 0.5% gain expected.

Initial Jobless Claims for last week were 313,000, slightly worse than expected. 

The S&P 500 fell after the open, hitting an intraday low of 2105.93 before finishing at 2110.74, down 0.15%, in volatile trade.

Tech stocks outperformed as Apple (AAPL) bounced back from yesterday's 2.6% decline. The NASDAQ Composite rose 0.4% to 4987.89.

Energy stocks were notably weak courtesy of the decline in crude oil. The Energy Select Sector SPDR ETF (XLE) declined by 1.9%. (CRM) was a standout performer today, driving 11.7% higher on its solid fourth-quarter earnings report.

On the negative side, Sears Holdings (SHLD) fell 4.9% after reporting disappointing fourth-quarter revenues.

European bond yields were broadly lower today as traders continue to scoop up bonds ahead of the ECB's QE program, which begins in March.

This morning, the German 7-year yield fell below zero for the first time ever, just a day after Germany first sold 5-year debt at a negative yield.

Tomorrow's Financial Outlook

Friday will mark yet another day with a heavy round of data.

At 8:30 a.m. ET, the second estimates of fourth-quarter GDP will reported, followed by ISM Milwaukee at 9:00 a.m, Chicago PMI at 9:45, and Pending Home Sales and University of Michigan Sentiment at 10:00 a.m.

On the global front, Japan Housing Starts and German CPI will be released in the morning.

There are no major companies reporting earnings.

Twitter: @Minyanville

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