The US market: overview and forecast for February 20. Mixed expectations

The market the day before

Trading on February 16 on American stock exchanges took place in negative territory. The S&P 500 fell by 0.48%, the Dow Jones Industrial Average decreased by 0.37%, and the NASDAQ 100 lost 0.82%. Shares of small-cap companies showed the worst results: the Russell 2000 fell by 1.39%, but at the end of the week it still outperformed the S&P 500 by more than 130 bps. The producer price index increased by 0.3% mom in January, the largest increase since August (above the forecast of 0.1% mom). Excluding food and energy, the basic producer price index rose by 0.5% mom, which is significantly higher than the consensus, which assumed a rise of 0.15% mom. The reason for the surprise, as in the consumer price index, was financial services and medical care. These data were evaluated in the context of the January consumer price index report, published that week, which was more "hot" than the market expected. However, the economy is far from "overheating". January statistics on housing starts (fact: 1.33 million, consensus: 1.47 million) and the number of construction permits issued (fact: 1.47 million, consensus: 1.51 million) were weaker than forecast. Against the background of the information released, Treasury bond yields rose, ten-year treasuries rates added about 6 bps and stopped at 4.29%, two-year securities yields reached 4.67%. WTI quotes froze near the highest level in more than three months and are trading at more than $79 per barrel after another Houthi attack in the Red Sea.