Stocks Waver on Tame CPI, Alibaba Added to Pentagon China List
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News when you want it with Bloomberg News Now. I'm Nathan Hager. We have made it to the end of the trading week ahead of a long holiday weekend for President's Day. That is the sound of the opening bell on this Friday morning from the floor of the New York Stock Exchange. And at the open, stocks are looking for direction. Right now, the S&P 500 is a little changed, trading above 6,800. The Dow Jones Industrial Average is swinging between gains and losses at the open, trading around 49,400. And the Nasdaq Composite opens lower by about a tenth of 1%. The 10-year Treasury yield is down three basis points after a softer-than-expected reading on inflation. The January consumer price index fell to 2.4 percent, lower than economists expected.
The core reading that leaves out food and energy rose three-tenths of one percent from December. That put the year-over-year reading there in line with estimates at two-and-a-half percent. The numbers have traders raising bets for a third rate cut from the Fed this year, but Morgan Stanley Chief Investment Officer Jim Caron says he's not there yet.
I'm still in the camp that there's maybe one more cut this year, possibly two. So and I think that's pretty much well in the price at this point, as far as where the two year Treasury is currently trading.
Morgan Stanley, CIO Jim Caron was on Bloomberg surveillance. And right now, the two year Treasury yield is down more than three basis points to three point four two percent. Shares of Alibaba traded in the U.S. are down 3% at the open. The Chinese e-commerce giant was just added to the Pentagon's list of firms tied to the Chinese military. We get more from Bloomberg Tech anchor Caroline Hyde.
What it means is that... They believe that Alibaba, like Tencent was announced a few months ago, that they are in some way working alongside the military. What it means is that are we going to see forced selling from a number of the big ETFs, big BlackRock and the like who own ADRs of the likes of Alibaba? Are they going to be forced to no longer hold on to these?
How did the latest CPI report affect stock market trends?
particular companies.
Bloomberg's Caroline Hyde reports other Chinese firms including Baidu, Huawei Technologies and EV makers BYD and NIO were also added to the Pentagon list. Baidu and NIO shares traded in the U.S. are lower as well. The White House may be thinking of narrowing its broad tariffs on steel and aluminum. Bloomberg News has learned the U.S. Trade Representative's office is scrambling to make changes after the European Union complained about 50 percent duties on the metals. And companies ran into their own issues calculating the tariffs on products that contain the metals. Bloomberg Global Trade Editor Brendan Murray has more.
You can imagine how hard it is to figure out how much of the contents of a product you import contains steel and aluminum. And those companies have complained to the White House and the White House has acknowledged. that the complexity has gotten too much for these companies to handle.
Bloomberg's Brendan Murray reporting. Treasury Secretary Scott Besson told CNBC this morning that any changes would be incidental and that President Trump would make the final decision. Secretary Besson also said there may be a deal in the Senate to hold confirmation hearings for Fed Chair nominee Kevin Warsh, even with Republican Senator Tom Tillis threatening to delay the vote. until the investigations into current chair Jay Powell and Fed Governor Lisa Cook are resolved. We got a response from Senator Tillis.
I have no intention of allowing any Fed board nominee to move forward out of committee and to be confirmed until this matter is settled.
Republican Senator Tom Tillis spoke to Bloomberg Surveillance from the Munich Security Conference, where we've also heard from German Chancellor Friedrich Merz.
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