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

Good morning. Markets find their feet after the CPI shock, steady UK inflation gives traders unexpected relief and a “clerical error” causes [View in browser]( [Bloomberg]( Good morning. Markets find their feet after the CPI shock, steady UK inflation gives traders unexpected relief and a “clerical error” causes a major round trip for Lyft shares. Here’s what’s moving markets. — [David Goodman]( Tentative comeback Markets are showing [small signs of a comeback]( on Wednesday after the sharp drops triggered by yesterday’s CPI print. Contracts on the S&P 500 ticked higher after the worst inflation-day drop for the index since September 2022., while benchmark Treasury yields retraced some of the previous day’s surge. The stock market’s “fear gauge” — the VIX — pared just over a third of yesterday’s move, while bets on Fed rate cuts recovered, with the first move now priced for June, rather than July. UK boost The better tone was helped by data out of the [UK showing inflation unexpectedly held steady in January](, allaying fears of an increase. Set against the context of the hot US number, the relatively minor surprise sparked a major relief rally, pushing up UK stocks and sending two-year gilts toward their best day since mid-December. For households, the best bit of news was that statisticians [said food prices are finally falling again]( after more than two years of unbroken rises. Bond rout Much of the damage from the hotter-than-expected US CPI print may prove more lasting. The data has [wiped out the the last remnants of a global bond rally]( that started in December when Jerome Powell sparked hopes the Fed had finally pivoted to favor interest-rate cuts. A Bloomberg index of global debt has dropped 3.5% this year, erasing all of its gains since Dec. 12, the day before Powell’s pivot. Lyft’s wild ride Ride-hailing provider Lyft has been on [quite the journey since yesterday’s close](. The firm saw shares soar 67% in after-hours trading after releasing results that showed projected earnings jumped by 11% and included a prediction that margins were set to expand this year by an eye-watering 500 basis points. But less than an hour later, CFO Erin Brewer said the company is actually expecting margins to expand by 50 basis points, with a company spokesperson later attributing the mistake to a “clerical error”. By the time premarket trading opened on Wednesday morning the gain had pared to about 17%. Coming up… The US reports mortgage application data and revisions to PPI numbers later today, while Chicago Fed President Austan Goolsbee and Federal Reserve Vice Chair for Supervision Michael Barr both make remarks. Earnings include Twilio, Cisco and Kraft Heinz. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - [Massive office tower losses]( reveal hidden risks across the globe. - Apple’s longest-serving designer is[set to leave the company.]( - John Authers says [CPI intransigence](is the next big challenge. - UniCredit is set to [boost its bonus pool by 16%]( after a record year. - Ex-General Prabowo is [poised to win Indonesia’s presidency](. - StanChart [weighs break up]( of its corporate and investment arms. - Gamblers in Nevada [wagered a record $185.6 million]( on the Super Bowl. And finally, here's what Joe’s interested in this morning Well. It's not surprising really. Yesterday in here I wrote about some of the wild, chunky moves we'd been seeing to the upside in markets. Just huge green arrows for names like NVDA, Arm Holdings, Super Micro, and so on. So then the market ran into a buzzsaw with that hot CPI report yesterday. The S&P 500 fell 1.4%. The Nasdaq Composite fell 1.8%. What's funny though is that the actual FOMO names did just fine. You'd think intuitively they'd lead the way on the downside. They lost a little. But NVDA was only down 0.17% on the day. And today pre-market, at the time I'm typing this, it's already up 1.6%. Bitcoin has also caught this same tailwind, and it too barely budged yesterday. As of right now, it's above $51K, its highest post-ETF level. Speaking of the CPI data, that makes two big releases showing unexpected heat or upward momentum. There was the January jobs report, which showed way more job creation than expected. And then this. And with both reports, there are some reasons to wonder about the headline numbers. With the jobs report, there was some softening in areas like U6 unemployment, and hours worked. With CPI, maybe seasonal adjustments had a distorting effect and there was that weird gap between the Rent of Primary Residence measure and OER. But whatever, you can asterisk and adjust all you want. At least for the moment, Team Heat has the data on its side. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. 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