5 things to know before the stock market opens Monday, February 14

On Feb 15, 2022

Here are the most important news, trends and analysis that investors need to start their trading day:

1. Futures steady after comments from Russia’s top diplomat

Traders on the floor of the NYSE, Feb. 11, 2022.

Source: NYSE

U.S. stock futures wiped out sharp earlier losses and turned briefly positive to start the new week after Russian Foreign Minister Sergey Lavrov on Monday appeared to suggest Moscow would continue talks with EU and NATO officials over Ukraine. Investors are monitoring the possibility of Russia invading Ukraine and the Federal Reserve raising interest rates more aggressively this year, starting next month.

The 10-year Treasury yield topped 2% last week for the first time since 2019 after Thursday’s biggest 12-month gain in consumer prices since 1982 and again Friday after U.S. Secretary of State Antony Blinken said a Russian “invasion could begin at any time” in Ukraine. The 10-year yield turned positive Monday on the Lavrov comments, pushing back to 1.98%.
The Dow Jones Industrial Average on Friday tumbled 503 points, or 1.4%. The S&P 500 dropped 1.9% and the Nasdaq Composite shed 2.8%. All three stock benchmarks were lower for the week.

2. Fed’s Bullard says ‘our credibility is on the line’ to deal with inflation

James Bullard

Olivia Michael | CNBC

St. Louis Fed President James Bullard on CNBC on Monday reiterated he’d like to see rates rise by 100 basis points by July. “Our credibility is on the line here,” Bullard added, referring to the need to deal with escalating inflation. He added the Fed should “front-load” tightening. Bullard’s rate call roiled markets Thursday.

There are three regularly scheduled Fed meeting before Bullard’s deadline — in March, May and June. The markets are pricing in about a 55% chance of seven Fed rate hikes this year, according to the CME. The central bank releases minutes from its January meeting Wednesday, with investors watching carefully for any new insights on its rate plans, inflation outlook or balance sheet wind down.

3. Week ahead: Wholesale inflation, retail sales data and earnings

In the week ahead, there’s more key inflation data, with January’s producer price index scheduled for Tuesday. That report is also expected to be very hot, after January’s CPI. Surging inflation has caused consumer sentiment to slump, and now economists are watching consumer spending closely. That means January’s retail sales will be important when that data is released Wednesday.

There’s also a final rush of big earnings, with Cisco Systems and Nvidia on Wednesday; Walmart on Thursday; and Deere on Friday. With more than 70% of the S&P 500 companies already having reported financial results, according to FactSet, over three-quarters of them beat on earnings. However, 47% of S&P 500 names issued negative EPS guidance.

4. Russian FM urges more talks with West amid Ukraine tensions

Lavrov, Russia’s top diplomat advised President Vladimir Putin on Monday to continue talks with the West on Russian security demands amid…