AMJ (Alerian MLP Index tracking fund)
Inflation rises faster than expected in January as high prices persist
The yield on the 10-year Treasury note surged after Jan inflation data came in stronger than expected. The 10-year Treasury yield added nearly 10 basis points to 4.269%, while the yield on the 2-year Treasury climbed more than 13 basis points to 4.601%. Yields & prices move in opposite directions, & 1 basis point equals 0.01%. Market participants have watched for any signs that inflation has cooled enough to allow the Federal Reserve to begin cutting interest rates. But today's data added to doubts that the central bank would be able to lower the cost of borrowing several times this year, which has been a centerpiece of equity market bullishness in recent months. Some investors are even anticipating 10-year yields moving back above 5.00%. Later in the week, Jan retail sales figures are slated for release on Thurs, while the Jan producer price index comes out on Fri.
10-year Treasury yield shoots higher as January CPI is hotter than expected
Coca-Cola sales beat estimates, helped by higher prices
After the inflation data was released today, the markets priced in a 94% chance the central bank will hold rates steady at its next meeting, up from 84% yesterday. With the popular stock averages at record levels & following an almost 4 month spectacular rally, investors were expecting the Fed to cut rates rapidly this year. Disappointment brings on significant selling, although there has been some bargain hunting in the last hour.
Dow Jones Industrials
