Stocks were mixed in early trading this week as investors absorbed key economic data amid mounting concerns around inflation pressures. Specifically, retail sales numbers exceeded even the most optimistic of forecasts, surging by 5.3% in January. These impressive numbers reflect a seasonal boost following weaker than normal holiday spending in December along with renewed income support from fiscal stimulus. With inflation top of mind, market sentiment was tempered following the release of producer price index (PPI) data on Wednesday. The report came in well above consensus expectations, with prices increasing by 1.3% in January – the largest advance since the series began in December 2009. On the virus front, signs of progress on the vaccine front continue, with Covid-19 cases and hospitalizations dropping dramatically with almost 12% of the U.S. population having received at least one dose of the vaccine. Interest rates moved higher this week, with the yield on the 10-year Treasury note trading around 1.27% respectively mid-week.

Sources: GSAM, CNBC, JPM, Bloomberg, FactorInvestor

 

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