5 Things You Need to Know to Start Your Day: Americas

Good morning. The US inflation report is taking center stage on Wall Street, plus tech stocks are drawing crowds and a maturity wall in US c [View in browser]( [Bloomberg]( Good morning. The US inflation report is taking center stage on Wall Street, plus tech stocks are drawing crowds and a maturity wall in US commercial property loans is much bigger than previously thought. Here’s what people are talking about. — [Sofia Horta e Costa]( Inflation day It’s CPI day. The January figures, which drop at 8:30 a.m. New York time, are likely to show [disinflation has spread from goods to services](, according to the team at Bloomberg Economics. S&P 500 futures are currently lower, while Treasuries and the dollar are mostly flat as traders wait for the [data to provide some direction](. The slowdown in price pressures has helped build expectations for rate cuts this year, though Fed officials have repeatedly pushed back on the idea that they’ll be imminent. It’s why market bets on the upcoming easing cycle are moving closer to the Fed’s own projections, but Citigroup economists say the rate-cut period will be short-lived and there’s [the risk hikes will follow soon after](. Bloomberg Opinion’s John Authers considers how much of today’s CPI print [will matter for markets.]( All in on tech Everyone is going all in on US tech stocks. Allocation to the sector has reached the [highest since August 2020](, according to Bank of America’s latest fund manager survey, which also showed the most crowded trade by far was owning the so-called Magnificent Seven. The hunger for anything AI is helping, as Joe writes below, as are [cost-cutting plans]( from some of the biggest names like Meta and Amazon, announced in the latest earnings season. Chip designer Arm Holdings soared almost 30% yesterday despite no new triggers — and if the British company had opted to list in the UK last year, it would be the[FTSE 100’s third-largest stock now.]( ZoomInfo is up more than 20% in early US trading today after beating expectations. Maturity wall There are a lot of [commercial property loans coming due](. Nearly 20% of outstanding debt on US commercial and multifamily real estate — $929 billion — will mature this year, requiring refinancing or property sales. That’s far higher than an earlier estimate by the Mortgage Bankers Association, a surge attributed to loan extensions and other delays. About $4.7 trillion of debt from all sources is backed by US commercial real estate, ratcheting up concern among regulators because building values are sliding. Increasing defaults and write-downs have hit [lenders]( like NYCB, as well as KKR’s commercial mortgage real estate investment [trust]( and holders of commercial mortgage-backed securities. ‘Comfortable’ That’s the word Fatih Birol, executive director of the International Energy Agency, used to describe oil markets this year. Speaking to [Bloomberg Television from Paris earlier today](, he said that new supplies will satisfy demand and keep prices in check. He specifically noted swelling production from the Americas, predominantly the US, Canada, Brazil and Guyana, and said world consumption will increase at a weaker pace than in 2023 due to slowing growth in key markets like China. Meanwhile, OPEC’s top official — Secretary-General Haitham Al Ghais — said global oil demand will continue strong growth this year and a peak in consumption “is probably something way far out.’’ Oil is slightly higher on the day. Coming up… The US average weekly earnings data will also be released alongside today’s inflation figures. Mexico is due to report international reserves data. Earnings include Coca-Cola, Hasbro and Moody’s, as well as Airbnb, AIG and MGM Resorts International after the bell. Will Ozempic-like treatments spread in popularity and make Americans eat and drink less? Will chocolates no longer be the gift of choice for Valentine's Day? Will weight-loss treatments have an impact beyond the food and health industry? Share your views in the latest MLIV Pulse [survey](. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Snow is [set to blanket the northeast](, from New York to Boston. - Wages [rise more than expected in the UK](, complicating the BOE’s job. - MSCI deletes[ 66 Chinese stocks]( from its benchmark index. - A Macquarie banker [who earned more]( than Jamie Dimon is leaving. - Retail traders [lost billions](in India’s booming opti0ns market. - [Activist investor Carl Icahn]( discloses a 9.91% stake in JetBlue Airways. - Tiger Woods has a [new marketing partner](after leaving Nike. And finally, here's what Joe’s interested in this morning The S&P 500 is up over 5% so far in 2024. That's obviously quite impressive, given that we're not even halfway through February yet. That being said, it feels as though the headline numbers for the bid indexes are understating some of the exuberance. Some of these moves we're seeing are wild. Probably the one that's capturing the most attention is the [chip company Arm Holdings](. Just last week its market cap was below $75 billion. As of yesterday it's above $150 billion. A double for a company this large and established is wild. Super Micro, another company riding the AI wave, was around a $15 billion company at the start of the year. Today it's close to $45 billion. Of course, you've probably seen plenty of NVDA charts, so I won't bother to post that here, except I'll note that at one point yesterday it briefly had a larger market cap than Amazon. Cloudflare is another company that just spiked over 20% after posting strong earnings, and capturing AI enthusiasm. Meanwhile, outside of the AI realm, crypto has been on a tear over the last week or so, with Bitcoin gaining 16% in 7 days, surpassing previous post-ETF highs. Anyway, to zoom out a bit and also extrapolate a little, if you were to just look at what's going on in the market right now, you might not necessarily think this is an environment where the Fed is inclined to cut rates. Obviously tracking a handful of stocks is not part of the Fed's official remit. But to the extent that monetary policy works through financial conditions, and we're seeing money flowing into certain spaces in dramatic fashion, it's something to pay attention to. In a note to clients yesterday, Tim Duy, Chief US economist at SGH Macro Advisors, mentioned that some clients are wondering about the risk that the next Fed move is actually a hike. Duy is skeptical of that for multiple reasons. But it's interesting that that idea is creeping into some people's consciousness. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. 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