Good morning!

U.S. stocks are chasing a new record high in Tuesday trading, buoyed by a decline in Treasury bond yields and modest gains in European markets. In a holiday-shortened week, investors are focusing on the effects of new tariff policies and the overall health of the domestic economy. Here's what's happening ...

• As Q4 earnings season winds down, there are still more than 550 companies reporting. This morning, numbers are due from Medtronic, Occidental, Vulcan Materials, Entergy, and Baidu, followed Wednesday by HSBC, Analog Devices, Carvana, and Garmin. Thursday earnings are up for Walmart, Alibaba, and Booking Holdings, followed Friday by NatWest Group and U.S. Cellular. *

• As traders enjoyed a break on Presidents’ Day, Federal Reserve officials emphasized the need to delay rate cuts due to persistent inflation, although there was a hint of optimism. Their collective remarks are paving the way for the highly anticipated release of the Fed’s January meeting minutes on Wednesday, which will be closely monitored by investors focused on interest rates. Philadelphia Fed President Patrick Harker highlighted the importance of patience as policymakers await a reduction in price pressures. In contrast, Federal Reserve Governor Michelle Bowman argued against any easing until there is more clarity on the impact of President Trump’s tariffs. **

• On Friday, the National Association of Realtors releases its existing home sales report for January. Analysts expect a 4.2% decline in sales from a surprising December bump. High mortgage rates continue to dog the housing market; the average 30-year fixed mortgage rate reached 6.96% in January, up from 6.72% the previous month and the highest level since last May. Many homeowners who secured historically low mortgage rates during the pandemic had been reluctant to sell, fearing higher rates on a new loan. ***

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Martin Lombrano

Primary Advisors

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