Russell 2000, Treasury yields respond to January CPI data
According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) climbed 3.1% year-over-year in January, coming in hotter than expected by economists. Markets have begun to react to the inflation print, with volatility (^VIX) beginning to climb.
Yahoo Finance Senior Markets Reporter Jared Blikre joins the Live show to break down the latest market numbers and what it could mean for the broader market moving forward.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- Well, Jared Blikre also at home base here at the interactive. So Jared, what are you watching?
JARED BLIKRE: I'm watching the small caps here. In fact, I'm watching all the indices. But the Russell 2000, down about 3.5%. And I've been tracking this over the last few days because, by the way, this is a three-month chart. Last three days were huge green candle bullish days, and now we're seeing a little bit of a pullback here.
I was a little bit excited about the break of this trend line here, but now we're right back at it. Sometimes this happens, you test it, and then see if you can move on. I would remind people, this is somewhat reminiscent of what happened exactly one month ago, when we had the December CPI that was released in January. The headline number was a little bit hotter than expected. The, I think it was without gas and also in food, it was a little bit it was as expected. So not quite the same.
But nevertheless, it came in a little bit hot. We saw stocks take a little bit of a tumble in the morning, and then they rose at the end of the day or into the close here. Now, let me show you the 10-year T note yield. This is important because it is breaking above what has been resistance, served as resistance for several weeks now. Higher interest rates, this can weigh on stocks, especially if the move is pretty quick the way we've been seeing.
We can also take a look at the VIX, Matty was just taking a look at that with a guest. We've had the VIX up several days in a row, so we're going to want to keep an eye on that. And then also the US dollar. US dollar has been at a crossroads here, and it is breaking higher. You can see this is the highest level it's been in months. So bottom line is, we're getting a little bit defensive here. I would remind viewers that February, the worst month of the year for the presidential election cycle. So it would be normal to take a bit of a pause here.
- Jared, Thanks so much for really breaking all of that down, some of the sector move here that we're tracking. Interesting energy. The lone bright spot here on the day. Appreciate it, Jared.
