Morning Brief: Investors await big US inflation report
Wednesday, February 14, 2018
What to watch today
The biggest inflation report in a long time is due out on Wednesday. At 8:30 a.m. ET, the Bureau of Economic Analysis will release the January consumer price index, a key check on whether inflation pressures are beginning to accelerate in the U.S. economy. The January reading on retail sales will also come out Wednesday morning, with an expected slowdown from December.
Recall that back on Feb. 2, the January jobs report showed that wages rose 2.9% over the prior year, more than expected and a sign that inflation could return to the economy more quickly than expected. This sent Treasury yields higher, pressuring stock prices and beginning the stock market chaos last week that twice saw the Dow lose more than 1,000 points in a single trading session.
Expectations are for headline CPI — which includes the more volatile costs of food and gas that the Fed prefers to exclude from its inflation readings — to rise 0.3% over the prior month and 1.9% over the prior year. “Core” inflation is expected to rise 0.2% over the prior month and 1.7% over the prior year.
Top news
Chipotle turns to Taco Bell’s ‘Doritos Locos’ chief as new CEO: Chipotle Mexican Grill Inc. (CMG) has hired Brian Niccol, known for bringing “Doritos Locos Tacos” and mobile ordering to Taco Bell, as its next chief executive to turnaround the once red-hot burrito chain that has been battered by food safety lapses. Shares of Chipotle were up 11.8% at $281.03 in extended trading, still less than half their $742 high set in 2015, before sales-crushing E.coli, Salmonella and norovirus outbreaks sickened hundreds of U.S. customers. [Reuters]
Dalio’s Bridgewater boosts gold holdings in SPDR, IShares: Billionaire hedge fund manager Ray Dalio boosted his holdings in the two largest gold-backed ETFs last quarter before prices of the metal capped the biggest annual gain in seven years. As of the end of December, Dalio’s Bridgewater Associates, the world’s biggest hedge fund, raised its stake in SPDR Gold Shares and iShares Gold Trust, a regulatory filing showed Tuesday. [Bloomberg]
Uber’s fourth-quarter loss narrows to $1.1 billion: Uber Technologies Inc. narrowed its fourth-quarter loss to $1.1 billion from a loss of $1.46 billion in the previous quarter, a person familiar with the matter told Reuters. The ride-hailing company’s quarterly revenue rose 11.8% to $2.2 billion from its previous quarter, the source said. [Reuters]
Netflix hires away star producer at Fox: In the latest sign of the escalating battle for talent in the entertainment industry, Netflix Inc. (NFLX) has signed producer Ryan Murphy to a multiyear, multimillion-dollar deal to create content exclusively for the streaming service starting this July. Shows that Murphy has produced include “Glee,” “American Horror Story,” “American Crime Story” and “Rescue 9-1-1.” [The Wall Street Journal]
Cleveland Fed’s Mester is being considered for vice chair post: The White House is considering Federal Reserve Bank of Cleveland President Loretta Mester as it reviews candidates to be the central bank’s vice chair, according to a person familiar with the matter. The person, who discussed the situation on the condition of anonymity, said Mester impressed the selection team, but said there was currently no front-runner for the post of No. 2 to Fed Chairman Jerome Powell. [Bloomberg]
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