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Tuesday, February 13, 2024

The overall market is currently experiencing high macro volatility.

Some of the largest moves in the market today include: Nasdaq 100 Index (US) has experienced an extreme move of -1.6%. S&P 500 Index (US) has experienced a move of -1.1%. US Dollar Index has experienced a move of +0.6%.

The U.S. annual inflation rate decreased to 3.1% in January from December’s 3.4%, surpassing forecasts of a drop to 2.9%. Monthly CPI rose by the most in four months at 0.3%, higher than expected, while core inflation remained steady at a two-and-a-half-year low of 3.9%, defying expectations for it to slow down and marking an uptick from the previous month that challenges disinflation trends—potentially influencing hawkish stances within the Federal Reserve as they consider interest rate decisions ahead of their next meeting, with significant implications for equities like S&P500 and currency valuations including USD strength against global counterparts.

All eyes are also on central banks such as Bank of Japan whose policy shifts could affect international bond markets and investment strategies through impacts on yield curves and financial conditions globally.

AI-generated summaries of notable ETF moves:

ISHARES RUSSELL 2000 ETF | IWM $196.00 -3.5%
The iShares Russell 2000 ETF’s price has moved significantly downwards. This can be attributed to higher-than-expected US inflation rates, including the Core Inflation Rate YoY of 3.9% and the overall Inflation Rate YoY of 3.1%. These macro events have historically caused volatility in the ETF, with an estimated normal level around 4.3x for each event respectively.

The iShares 7-10 Year Treasury Bond ETF’s price declined significantly, potentially due to higher-than-expected inflation rates in the US. This macro event is likely to have a significant impact on IEF’s volatility given its historical association with increased volatility during such events. The negative movement aligns with the performance of correlated asset, the US 2Y Treasury, which also saw a decrease in return. These movements may indicate concerns about inflation expectations or changes in monetary policy impacting fixed-income investments like treasury bonds.

AI-generated summaries of notable stock moves:

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Cadence Design Systems Inc | CDNS $281.50 -8.6%
Information Technology, Application Software
Cadence Design Systems Inc’s stock price declined significantly by -8.3% since the previous close. The company reported strong Q4 earnings, beating expectations with higher EPS and revenues. However, their outlook for FY 2024 fell slightly below expectations, which may have disappointed investors and contributed to the decline in stock price. Additionally, macro events such as higher-than-expected inflation rates could be causing increased volatility in both Cadence Design Systems specifically and the broader Information Technology sector. 

Zoetis Inc | ZTS $184.05 -6.4%
Health Care, Pharmaceuticals
Zoetis Inc’s stock price moved down significantly by following the company’s Q4 earnings report, which showed lower than expected EPS of $1.24 and revenues in line with expectations at $2.2B (Importance_score:0). The company also provided guidance for FY 2024, setting their EPS range below expectations at $5.74-$5.84 and revenue range slightly above estimates at $9 .1B-$9 .2billion(Importance_score:0). Additionally, macro events such as higher-than-expected inflation rates could potentially impact ZTS and the overall Health Care sector volatility based on historical patterns. 

Moody’s Corp | MCO $380.01 -5.3%
Financials, Financial Exchanges & Data
Moody’s Corp stock price decreased significantly since the previous close, potentially influenced by disappointing Q4 earnings and revenue that missed expectations. Moody’s also provided lower-than-expected EPS guidance for FY 2024. Additionally, macro events such as higher-than-forecasted inflation rates may have contributed to market volatility in the Financials sector where Moody’s operates. The correlation between Moody’s stock and the Russell 2000 Index suggests a potential association with broader market movements. 

Ecolab Inc | ECL $214.75 +5.8%
Materials, Specialty Chemicals
Ecolab Inc’s stock price has risen 5.9% since the previous close, outperforming its sector peers and leading the sector’s strength. This is likely due to strong Q4 earnings with higher than expected EPS of $1.55 and revenues of $3.9B, along with positive outlook for future growth highlighted by an increase in their adjusted EPS range by 17% to 25%. Winning new business contracts, breakthrough technologies, and digital capabilities are contributing factors as well. 

Biogen Inc | BIIB $237.79 -3.6%
Health Care, Biotechnology
Biogen Inc’s stock price decreased due to lower than expected Q4 earnings and revenues, with EPS at $2.95 (vs $3.18) and total revenue of $2.386 billion (down 6.2%). The company also provided guidance for 2024 indicating a decline in performance compared to previous years, attributed to Aduhelm costs and declining sales of multiple sclerosis therapies.

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