US Stock Futures Take a Breather After Record Highs
US stock futures took a breather on Monday after closing out a dizzying week at record highs. Investors now brace for a looming inflation update that could put that rally to the test.
Stock Futures
Futures on the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) wavered below the flatline on the heels of notching new closing highs. Contracts on the Nasdaq 100 (^NDX) were also little changed following a stellar week for tech stocks.
Inflation Data’s Impact on Stock Market
New inflation data in the coming days will test the staying power of the breakout rally that followed Nvidia’s results. A hotter-than-expected CPI report spooked the market and sparked a stock sell-off earlier in February. Investors are already weighing the chances of a surprise in Thursday’s PCE index reading.
Importance of PCE Index
Given the PCE index is the Federal Reserve’s preferred inflation gauge, the reading will factor into the ongoing debate on the timing of a rate cut.
The Stunning Stats from a Broad Market Rally
Powered by excitement over AI stocks, the broader market continues to notch some impressive streaks.
Highlights of the Market Rally and Vulnerability
The S&P 500 has now advanced for 15 of the last 17 weeks, a feat that has only happened one other time in the last 50 years, back in 1989. If the S&P 500 finishes positive again this week, that would make 16 out of 18 positive weeks, which would be a joint record since the index’s creation in 1971.
The gains, however, highlight some vulnerable areas in the market rally, particularly in terms of inflation persistence and the potential impact of central bank rate decisions.
Key Quotes from Buffett’s Annual Letter
Berkshire Hathaway’s market value approaches a record $1 trillion for the first time. Warren Buffett’s annual letter to shareholders emphasizes the company’s resilience and its strong performance in Japanese investments.
Buffett’s Investing Wisdom
Buffett’s letter highlights the need to invest in businesses enjoying good and enduring economics. He emphasizes the value of enterprises that can deploy capital at high future returns and warns against the casino-like behavior exhibited in today’s markets.
Buffett reaffirms his investment rule of never risking permanent loss of capital and emphasizes the importance of being prepared for economic paralyses.
