Blue Owl permanently restricted withdrawals from its $1.6bn private-debt fund, selling $1.4bn of loans at 99.7% of par and planning a 30% NAV distribution in Q1. El-Erian questioned whether it’s an early warning sign for private credit, though not a 2008-scale threat.Summary:$1.6bn Blue Owl Capital Corp. II fund permanently restricts investor withdrawals.Blue Owl sold $1.4bn of loans, including $600m from the restricted fund.Loans sold at 99.7% of par, signalling pricing resilience.Firm plans to return 30% of NAV of the frozen fund in Q1 via capital distributions.Public BDCs sold $400m each in loans as part of the transaction.Shares of Blue Owl Capital fell about 10%, down over 25% YTD.BDC discounts: OBDC at 81% of NAV, OTF at 73% of NAV.Mohamed El-Erian calls it a potential “canary-in-the-coal-mine” moment, though not 2008-scale systemic risk.A $1.6 billion private-debt fund managed by Blue Owl is permanently restricting redemptions, escalating investor scrutiny of liquidity risks in the fast-growing private credit sector and sending shares of its investment manager sharply lower.Blue Owl Capital Corp. II, a non-listed retail-focused business development company (BDC) that lends to middle-market firms, will no longer allow investors to withdraw funds. Instead, it plans to distribute capital quarterly, beginning with a 30% return of net asset value in Q1, the firm said Wednesday.The move follows the sale of $1.4 billion in loans to four large public pension and insurance investors. Of that amount, approximately $600 million came from the restricted Blue Owl Capital Corp. II fund. The loans were sold at 99.7% of par value, which Blue Owl highlighted as evidence of strong buyer confidence in its direct lending platform.Barclays analysts described the transaction as “not a forced sale,” adding that disposing of private credit assets effectively at par is positive for the credit profile of its BDCs.Still, markets reacted sharply. Shares of Blue Owl Capital (OWL) dropped roughly 10% on Thursday, deepening losses to more than 25% year to date, according to FactSet data.Blue Owl’s publicly traded vehicles were also involved in the asset sales. The $16.5bn Blue Owl Capital Corp. (OBDC) and the $6.2bn Blue Owl Technology Finance (OTF) each sold $400m in loans as part of the broader $1.4bn transaction.Valuation pressure has been building. OBDC was recently trading at 81% of NAV, while Blue Owl Technology Finance traded at 73% of NAV, reflecting investor scepticism toward private credit valuations—particularly in the software sector, where AI-driven disruption has clouded growth outlooks.The redemption halt also revives comparisons to past liquidity stress events. Former Pimco CEO Mohamed El-Erian asked whether the episode represents a “canary-in-the-coalmine” moment akin to the collapse of two Bear Stearns hedge funds in August 2007.El-Erian wrote that the private credit boom in advanced economies may have “gone too far overall,” while noting substantial differences across firms. He also referenced the risk of a “market for lemons” dynamic, where information asymmetry can undermine investor confidence in asset quality.However, he tempered concerns by emphasising that systemic risk today is nowhere near the magnitude of 2008, though he warned that a “significant, and necessary, valuation hit” could be looming for specific assets.The episode underscores a structural tension in private credit: offering retail-style liquidity in vehicles holding inherently illiquid middle-market loans. With rates higher and growth uneven, investor scrutiny of pricing, liquidity management and valuation marks appears to be intensifying. This article was written by Eamonn Sheridan at investinglive.com.

MUFG says recent dollar gains driven by stronger U.S. data and cautious Fed minutes are unlikely to last. Political uncertainty and concerns about Fed independence under President Trump may keep investor sentiment toward the greenback fragile.Summary:MUFG’s Derek Halpenny says recent U.S. dollar strength is unlikely to be sustained.Durable goods, housing and industrial production data all beat expectations.Fed minutes showed caution over further rate cuts, supporting the greenback.Halpenny argues dollar sentiment remains fragile under President Trump.Policy unpredictability and rhetoric around Fed independence weigh on outlook.National Economic Council Director Kevin Hassett criticised New York Fed tariff analysis.Halpenny sees such criticism as an example of potential White House interference riskThe U.S. dollar’s rebound following stronger-than-expected economic data and hawkish-leaning Federal Reserve minutes is unlikely to prove durable, according to MUFG Bank’s Derek Halpenny.The greenback firmed after a run of upside surprises in key activity indicators. Data on durable goods orders, housing activity and industrial production all exceeded expectations, reinforcing the view that U.S. growth momentum remains resilient. In addition, minutes from the latest meeting of the Federal Reserve highlighted caution among policymakers over delivering further interest rate cuts, suggesting a more patient approach to easing.While that combination typically supports the dollar through higher yield expectations and growth outperformance, Halpenny argues the broader backdrop leaves the currency vulnerable.He contends that investor sentiment toward the dollar is likely to remain fragile as long as Donald Trump remains in office, citing policy unpredictability and recurring tensions around central bank independence. In his view, political noise risks overshadowing near-term data strength.Halpenny pointed specifically to comments from National Economic Council Director Kevin Hassett, who criticised analysis from the New York Fed regarding tariffs. The episode, he suggested, serves as an example of how the White House could challenge or pressure institutional independence, a factor that can weigh on foreign investor confidence.Markets remain sensitive to any perceived erosion of Fed autonomy, particularly at a time when monetary policy credibility plays a central role in anchoring inflation expectations and sustaining capital inflows.In that context, MUFG argues that while cyclical data surprises may generate episodic dollar strength, structural and political risks could cap upside and contribute to ongoing volatility.Because its Friday, here's a Dolla This article was written by Eamonn Sheridan at investinglive.com.

A Supreme Court decision on key Trump tariffs is expected in the current opinion window (with Feb 20 highlighted), and JPMorgan’s trading desk outlines sharply different equity outcomes depending on whether tariffs are upheld, struck down, or swiftly replaced. With ~$124bn in customs duties through January, fiscal incentives may reinforce rapid “replacement” efforts if IEEPA tariffs are curtailed.Summary:Markets are braced for a U.S. Supreme Court ruling on key Trump-era tariffs as early as Friday 20 Feb, with additional opinion days Tue 24 Feb and Wed 25 Feb also flagged. JPMorgan’s trading desk scenario tree assigns 64% odds to “struck down + immediately replaced,” limiting net upside after an initial spike (desk estimate).JPM’s framework also assigns 26% to “tariffs upheld” (risk-off), 9% to “struck down after midterms,” and 1% to “struck down with no replacement.”The U.S. has taken in roughly $124bn in customs duties through January FY2026-to-date, highlighting the fiscal stakes. If the Court curbs the IEEPA pathway, the administration may pivot quickly to other authorities (e.g., Section 232/301/122), keeping effective tariff pressure higher than a simple “strike down” headline suggests.A long-awaited U.S. Supreme Court decision on the legality of President Donald Trump’s most sweeping tariffs could land as soon as this week, setting up potentially outsized cross-asset moves for equities, rates and the dollar. The Court has scheduled opinion days for Friday, 20 February, with additional opinion release dates Tuesday, 24 February and Wednesday, 25 February, a window that has kept markets on alert after weeks of “any day now” speculation. Against that backdrop, JPMorgan’s trading desk has circulated a probability-weighted playbook for how equities might react. The desk’s distribution is best read as scenario framing rather than a forecast.JPM trading-desk scenario tree (desk estimates)64%: Tariffs struck down and immediately replaced → S&P 500 +0.1% to +0.2% after an initial +0.75% to +1.0% spike26%: Tariffs upheld → S&P 500 -0.3% to -0.5%, with larger yield-curve moves9%: Tariffs struck down after midterms → S&P 500 +1.25% to +1.5%, Russell 2000 outperforms1%: Tariffs struck down with no replacement → S&P 500 +1.5% to +2.0%, Russell 2000 outperformsThe intuition is straightforward: the more the ruling reduces the expected effective tariff rate and the longer that reduction lasts, the more supportive it is for risk assets, especially domestically oriented small caps. Conversely, an “upheld” outcome risks a near-term hit to sentiment and a sharper repricing in rates as markets reassess inflation, growth and policy constraints.Why the “replace immediately” case mattersA central market argument is that even if the Supreme Court strikes down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the administration may be able to reconstitute similar levies under different legal authorities (though with different process, scope, and timelines). Coverage ahead of the decision has repeatedly flagged potential alternatives such as Section 232 (national security), Section 301 (unfair trade practices), and other tools like Section 122, which could be used to restore tariff pressure quickly and cap the equity upside from a headline “strike down.” That “headline vs. effective rate” distinction is why the desk’s base case is not the most bullish branch. It also fits the broader market narrative: tariff regimes can shift how trade happens more than they shrink deficits outright, and the policy/legal endgame may be messy, involving partial findings, multiple opinions, and follow-on actions by the White House and Congress.The fiscal angle adds pressureTariffs are no longer a side-show line item. U.S. government data show customs duties totaling about $124bn through January (fiscal year to date), underscoring why a court-driven disruption could have budget implications—and why policymakers may be incentivised to find replacement mechanisms if a major tariff channel is constrained.What to watch on the tapeIn practice, the first market move may come from positioning and headline interpretation: whether the ruling is read as (1) a clean removal, (2) a partial trimming, or (3) a legal procedural limitation that still leaves wide latitude. The second move is likely to be about “replacement speed”—how quickly the administration signals alternative tariff plans and under which authority. That’s where the JPM desk’s “spike then fade” logic in the 64% branch comes from. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s February flash PMIs strengthened across the board, with composite output rising to 53.8 and manufacturing gaining momentum. Export demand surged, backlogs hit record highs and price pressures firmed, while business confidence improved.Summary:Composite PMI: 53.8 (Jan 53.1), fastest growth since May 2023.Services PMI: 53.8 (Jan 53.7), quickest pace since May 2024.Manufacturing PMI: 52.8 (Jan 51.5), strongest since January 2022.Composite new orders rose at the fastest rate since May 2023.Export orders surged at the quickest pace in eight years.Employment growth remained solid; factory hiring strongest in over four years.Backlogs rose at a record pace (series began September 2007).Input costs and selling prices both accelerated; output prices at 21-month high.Business confidence climbed to a 15-month high.Earlier from Japan: Japan inflation slows to 1.5% in January, core measures ease. What will the BoJ think?Japan’s private sector growth strengthened in February, with all three S&P Global flash PMI readings improving from January and signalling the fastest overall expansion in nearly three years.The S&P Global Flash Japan Composite PMI Output Index rose to 53.8 from 53.1 in January, marking the strongest pace of expansion since May 2023 and extending the current growth streak to 11 months.Momentum broadened across sectors. The Flash Japan Services PMI Business Activity Index edged up to 53.8 from 53.7, its fastest reading since May 2024. More notably, the Flash Japan Manufacturing PMI climbed sharply to 52.8 from 51.5, the strongest level since January 2022, pointing to a firmer and more balanced recovery.New business growth accelerated in line with output. Composite new orders rose at the fastest rate since May 2023, with services seeing the strongest increase in 22 months. Manufacturers reported their steepest rise in sales since early 2022, supported by stronger underlying demand and new product launches.External demand was a standout. Composite export orders expanded at the fastest pace in eight years, driven primarily by a rebound in goods exports.Employment continued to rise at a solid pace, although slightly softer than January’s multi-year record. Factory payrolls expanded at the quickest rate in just over four years, while services hiring moderated somewhat. Despite increased staffing, capacity pressures intensified: backlogs of work rose at the fastest pace since the composite series began in September 2007.Price pressures also ticked higher. Input costs increased at a slightly sharper rate overall, with stronger cost inflation in services offsetting softer pressures in manufacturing. Output charge inflation hit a 21-month high, with services firms showing greater pricing power than factories.Looking ahead, optimism improved. Business sentiment reached a 15-month high, with firms citing stronger domestic and overseas demand, semiconductor and AI-related investment, product innovation and supportive political conditions following Prime Minister Sanae Takaichi’s recent landslide election victory.The data reinforce a narrative of broadening growth momentum in Japan’s economy, even as inflation dynamics and Bank of Japan policy remain closely watched. This article was written by Eamonn Sheridan at investinglive.com.

Japan inflation cools sharply in January, easing near-term pressure on the BoJ.Summary:Headline CPI y/y: 1.5% (exp. 1.6%, prev. 2.1%) — lowest since March 2022.Core CPI (ex fresh food) y/y: 2.0% (exp. 2.0%, prev. 2.4%).Core-core CPI (ex food & energy) y/y: 2.6% (exp. 2.7%, prev. 2.9%).National CPI ex fresh food & energy y/y: 2.6% (prev. 2.9%).CPI m/m: -0.1% (prev. -0.1%).Inflation run above the 2% BoJ target ends after 45 straight months.BoJ recently upgraded FY2026 inflation forecasts despite expected near-term dip.Growth backdrop remains soft after Q4 GDP of just 0.1% q/qJapan’s inflation cooled markedly in January, with headline consumer prices rising just 1.5% y/y, down from 2.1% in December and below the 1.6% consensus forecast. The reading marks the lowest annual inflation rate since March 2022 and ends a 45-month streak during which inflation remained above the Bank of Japan’s 2% target.On a monthly basis, CPI fell 0.1% m/m, unchanged from December.Core inflation measures also eased. The widely watched core CPI (excluding fresh food) slowed to 2.0% y/y, matching expectations but down from 2.4% previously. The “core-core” gauge, excluding both fresh food and energy, declined to 2.6% y/y from 2.9%, slightly below the 2.7% expected. The slowdown aligns with the Bank of Japan’s recent guidance that year-over-year inflation is likely to fall below 2% in the first half of 2026, reflecting stabilising food prices and government measures aimed at easing living costs.Despite the softer January print, the BoJ upgraded its fiscal 2026 inflation projections in its latest outlook. Core CPI is now seen at 1.9% (up from 1.8%), while core-core inflation is forecast at 2.2% (up from 2.0%). The central bank continues to balance moderating price pressures against wage dynamics and domestic demand resilience.On the political front, Prime Minister Sanae Takaichi recently secured a landslide election victory, with her Liberal Democratic Party winning 316 seats in the Lower House. Among her pledges is a two-year suspension of the 8% food tax, a measure that could further dampen near-term inflation readings.For markets, the key tension is between easing headline inflation, which reduces immediate pressure for tightening, and the BoJ’s medium-term inflation outlook, which still anticipates underlying price strength stabilising near target. This article was written by Eamonn Sheridan at investinglive.com.

This is just a post with the data. I'll have more, analysis and implications posted separately. Note that the 1.5% overall pace is below 2% for the first time since March 2022.The latest on the BoJ:BOJ expected to reach 1% by mid-year as yen intervention risks rise near 160 USD/JPYJBA chief says reasonable chance of BOJ rate hike to come in March or April This article was written by Eamonn Sheridan at investinglive.com.

Iran signals readiness to retaliate if attacked as Trump weighs military options over nuclear dispute.Summary:Iran told UN Secretary-General Antonio Guterres it does not seek war but will not tolerate military aggression.Tehran said all bases and assets of a “hostile force” in the region would be legitimate targets if attacked.The letter said President Trump’s rhetoric signals a “real risk of military aggression.”Warning follows reports Trump is weighing an initial limited strike to pressure Iran into a nuclear deal.U.S. options reportedly range from targeted strikes to broader regime-focused campaigns.Escalation risk raises concerns for oil markets and regional security architectureIran has warned it will respond “decisively” if subjected to military aggression, telling UN Secretary-General Antonio Guterres that while Tehran does not seek tensions or war, it will consider all bases, facilities and assets of a “hostile force” in the region as legitimate targets if attacked.In a letter from Iran’s permanent mission to the United Nations, officials said President Donald Trump’s recent rhetoric signals a “real risk of military aggression,” underscoring heightened tensions between Washington and Tehran.The warning comes amid reports that Trump is weighing an initial limited military strike designed to pressure Iran into accepting U.S. demands over its nuclear programme. According to earlier reporting, options under consideration include targeted strikes on select military or government facilities as an opening move, potentially followed by broader operations against regime-linked infrastructure if Tehran refuses to curb uranium enrichment.The limited-strike concept is said to be framed as leverage for diplomacy rather than an immediate full-scale campaign. Trump has publicly maintained that he prefers a negotiated outcome, though aides have reportedly presented a range of military scenarios, from calibrated attacks to larger-scale operations.Iran’s letter signals that even a limited U.S. strike could trigger retaliation across the region, raising the prospect of wider conflict involving U.S. bases and allied assets. Tehran’s reference to “all bases, facilities and assets” suggests a broad interpretation of potential targets, increasing the risk of spillovers beyond Iran’s borders.While Iranian officials emphasised they do not intend to initiate war, the message appears designed to deter U.S. action by raising the cost of escalation.The exchange highlights the delicate balance between coercive diplomacy and outright confrontation, with nuclear negotiations and regional security dynamics now tightly intertwined. This article was written by Eamonn Sheridan at investinglive.com.

Daly signals steady Fed stance, sees inflation easing and AI shaping the next phase of policy debate.Summary:San Francisco Fed President Mary Daly says policy is “in a good place” after 75bps of rate cuts last year.Labour market is “in a better place” and more subdued than before.Inflation is continuing to decline outside the goods sector.Expects inflation to ease further as tariff effects roll off.Describes the “last mile” on inflation as challenging due to shocks, including tariffs.Says AI capex reflects real demand, not speculative excess.Does not see AI investment generating fresh inflation pressures.Productivity effects from AI will be central to Fed assessment this year and next.Daly will be a voting member of the FOMC in 2027.San Francisco Federal Reserve President Mary Daly said monetary policy is “in a good place” following last year’s cumulative 75 basis points of rate cuts, arguing that the labour market has stabilised and inflation is expected to resume its downward path as tariff effects fade.Speaking in a live-streamed conversation with former Dallas Fed President Robert Kaplan, Daly said both sides of the Fed’s dual mandate, price stability and full employment, “seem to be in a good place.” She added that the central bank now has room to assess incoming data and evolving structural forces, particularly artificial intelligence and productivity.Daly noted the labour market is “more subdued than before,” reflecting the impact of earlier policy easing. She credited last year’s rate cuts with helping bring employment conditions into better balance, while also emphasising that the labour market does not always provide clear signals about underlying momentum.On inflation, Daly said price pressures continue to cool outside the goods sector and that she expects further moderation as the impact of tariffs rolls off. However, she acknowledged that the “last mile” in returning inflation to target has been difficult, citing repeated shocks, including trade-related disruptions, that have complicated progress.Artificial intelligence and capital spending were also a focus. Daly argued that AI-related investment is supported by genuine demand rather than speculative enthusiasm, saying “it’s not the Field of Dreams.” She added that she does not see AI-driven capex fuelling inflation, particularly given a more tempered labour market backdrop. Instead, the key question for policymakers will be the timing and magnitude of AI’s productivity boost.“This year and next,” Daly said, assessing how AI affects productivity and demand will be central to the Federal Open Market Committee’s policy deliberations.While she stressed that “we have more work to do” on inflation, Daly cautioned against overreacting in either direction, saying policymakers must avoid getting “behind” the curve or “over our skis.”Daly will hold a vote on the Federal Open Market Committee in 2027. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s February flash PMIs cooled across the board, signalling slower growth but firmer inflation pressures.Summary:All three S&P Global Australia flash PMIs fell from January, showing a clear loss of momentum after a strong start to 2026.Composite Output eased to 52.0 (Jan 55.7), still signalling growth for a 17th straight month.Services activity slowed to 52.2 (Jan 56.3), but continued to outperform manufacturing.Manufacturing output dipped to 51.5 (Jan 52.3), maintaining expansion but at a softer pace.New business growth cooled from January’s surge; exports rose only marginally.Hiring accelerated (services strongest in nearly three years), while backlogs were flat overall.Cost and selling-price inflation intensified, rising to the highest since September (per the release commentary).Business confidence stayed positive but fell to its weakest in around 18 months.Australia’s private sector kept expanding in February, but at a noticeably weaker pace as all three S&P Global flash PMI readings fell back from January’s strong prints.The Flash Australia Composite PMI Output Index eased to 52.0 in February from 55.7 in January, remaining above the 50-mark that separates growth from contraction and extending the expansion run to 17 consecutive months. The step-down signals that the burst of early-year momentum has cooled, with S&P Global pointing to a broad-based slowdown across output and new business.The slowdown was visible across the sector surveys. The Flash Australia Services PMI Business Activity Index fell sharply to 52.2 from 56.3, while the Flash Australia Manufacturing PMI eased to 51.5 from 52.3. Both sectors continued to expand, but services again posted the stronger of the two upturns even after the February pullback.New business rose for a 19th straight month but slowed from January’s 45-month high, with respondents citing stable customer bases, new contract wins and a general pick-up in demand conditions. Export business continued to rise but only marginally overall, with manufacturing export growth cooling more than services.On the labour front, hiring accelerated. Private-sector employment growth was described as the strongest in almost a year, with services job creation the strongest in nearly three years, while manufacturing hiring was the weakest in four months. Despite stronger hiring, the volume of outstanding work was unchanged in February as falling manufacturing backlogs offset a rise in service backlogs.Inflation signals firmed. The survey described a substantial intensification in cost pressures, led by stronger input-price increases for goods producers, linked to supplier prices and raw materials including metals, while services firms cited higher wages and electricity costs. At the composite level, both cost and charge inflation were reported at their highest since September, with services providers more aggressive in raising prices than manufacturers.Business confidence remained positive but slipped to its weakest in just over a year-and-a-half amid concerns about economic conditions, international uncertainty and competition. S&P Global economist Eleanor Dennison said the private sector “wasn’t able to maintain the speed of growth” seen in January, with softer output and orders growth across both manufacturing and services, stronger job creation, and a re-acceleration in price pressures. This article was written by Eamonn Sheridan at investinglive.com.

New Zealand January 2026 international trade data.NZD/USD not a lot changed on this, around 0.5975. This article was written by Eamonn Sheridan at investinglive.com.

Trump is weighing a limited strike on Iran as leverage for a nuclear deal, with escalation options on the table.Summary:The Wall Street Journal (gated) reports President Trump is weighing an initial limited strike on Iran.The opening assault could target select military or government sites within days.The aim would be to pressure Tehran into ending uranium enrichment and agreeing to a U.S.-favoured nuclear deal.If Iran refuses, the U.S. could escalate to a broader campaign targeting regime facilities.Diplomacy remains Trump’s stated preference, but military options are actively under discussion.This escalation is the talk of the globe. Yesterday brought this:CBS: US military ready for possible Iran strike as soon as Saturday, Trump undecidedMore here:investingLive Americas market news wrap: Rising US trade deficit dims GDP forecast (Trump: Good talks being had with Iran)President Donald Trump is weighing an initial, limited military strike on Iran as part of a strategy to pressure Tehran into accepting U.S. demands on its nuclear programme, according to a report by the The Wall Street Journal.Citing people familiar with the matter, the Journal says the opening phase could involve targeted strikes on a handful of Iranian military or government facilities. The operation, if authorised, could come within days and would be designed as a calibrated show of force rather than a full-scale assault.The objective would be to compel Iran to halt uranium enrichment and return to negotiations on terms favourable to Washington. However, officials reportedly warned that if Tehran refused to comply, the U.S. could escalate to a broader military campaign aimed at regime infrastructure and potentially destabilising the government in Tehran.The limited-strike concept, which has not previously been reported, suggests Trump may view military pressure not merely as retaliation but as leverage to shape a diplomatic outcome. One person familiar with internal discussions said the strategy could involve gradually intensifying strikes, starting small and expanding operations until Iran either dismantles its nuclear activities or faces existential pressure.While it remains unclear how seriously Trump is leaning toward the option, senior aides have repeatedly presented the scenario during weeks of deliberations. More recent discussions have reportedly focused on larger-scale campaigns, underscoring the fluid and high-stakes nature of the debate inside the administration.Despite the military planning, Trump has publicly maintained that he prefers a diplomatic resolution—though officials acknowledge that the threat of force is being positioned as a key negotiating tool. This article was written by Eamonn Sheridan at investinglive.com.

US December trade balance -70.3B vs -55.5B expectedInitial jobless claims 206K vs 225K estimateUS February Philly Fed Business Index +16.3 vs +8.5 expectedAtlanta Fed GDPNow final reading 3.0% vs 3.6% priorEIA weekly crude oil inventories -9014K vs +2149K expectedTrump: Good talks being had with IranUS January pending home sales -0.8% vs +1.3% expectedFed's Kashkari: Labor market is softer but still "decent to pretty good"Walmart Q4: Consumer still spending but the guidance is the story for the FedCanada December trade balance -1.31B vs -2.59B priorMarkets:WTI crude oil up $1.56 to $68.75US 10-year yields down 1 bps to 4.07%Gold up $20 to $4999AUD leads, CHF lagsS&P 500 down 0.3%The market focus seems to be shifting towards Iran as oil prices hit the highest since August on reports of a persistent US military buildup in the region. That's sparked a persistent bid in the US dollar that extended today. Some of the thinking is that any Iranian oil disruptions -- like higher prices or a closure of the Strait of Hormuz -- would fall harder on Europe than the US. WTI crude rose strongly.In economic data, the softer US trade balance report led to some notable downgrades to tomorrow's advanced Q4 US GDP report and likely means the full-year 2025 number will be below 3%.The good news for the US was that initial jobless claims fell back and the Philly Fed improved. I highlighted comments from the Deere & CO CFO would said:"The developments over the course of the past three months has strengthened our belief that 2026 marks the bottom of the current cycle."Shares of DE were up 11.6% today.Overall, the moves in FX were small and stocks slipped modestly. This article was written by Adam Button at investinglive.com.

It's a busy session ahead with central bank speakers scheduled.We'll also get inflation data from Japan. Expectations are rising for a near term rate hike:BOJ expected to reach 1% by mid-year as yen intervention risks rise near 160 USD/JPYJBA chief says reasonable chance of BOJ rate hike to come in March or April This article was written by Eamonn Sheridan at investinglive.com.

Here are some numbers to consider:Shares of Deere & Company are up 12% today and 44% so far this year Shares of CAT rose 60% last year and are up 31% year-to-date.Caterpillar and Deere don't rally on order books. The jump in DE stock today came on a quarterly earnings beat on basically every metric. CAT, meanwhile, has been on a tear since late January when it posted a record $19.1 billion quarter and disclosed a $51 billion backlog — up 71% year-over-year. The stock has surged roughly 30% year-to-date and recently hit all-time highs near $790.Deere clearly says the cycle is bottomingThe headline numbers from this morning's DE call: net sales up 18% year-over-year to $8 billion for equipment operations, EPS of $2.42 versus the Street's $2.02 estimate, and a raised full-year net income guide to $4.5–5.0 billion. All three business segments posted higher sales. Construction & Forestry top line was up 34%. Small Ag & Turf was up 24%.But the real story is in the order books.Management said the C&F order book has risen over 50% in the past quarter and is now at its highest level since May 2024. Orders for construction and compact construction equipment were both up mid-teens. They raised the industry outlook for North American construction and compact construction to +5% and bumped their own C&F net sales guide to +15%.On large ag — still the weakest segment — the tone shifted meaningfully. Combine early order programs came in better than feared. Large tractor order velocity has picked up, with the order book now stretching into Q4. Used equipment inventories are finally clearing: late-model 8R tractors (model years '22 and '23) were down 20% sequentially in Q1 alone.CFO Josh Jepsen said it plainly: "The developments over the course of the past three months has strengthened our belief that 2026 marks the bottom of the current cycle."That's a pretty definitive statement from a company that tends to be conservative.The RAMP trade -- Real Assets, Margin PotentialI have been writing about something I've called the RAMP trade for awhile and the thinking is that companies with thin margins and heavy assets can use AI to boost productivity without facing the risk of disruption.CAT and DE might be the 'picks and shovels' part of that trade but they also stand to directly benefit. CAT has effectively become an AI infrastructure play hiding inside a 100-year-old industrial company. Power generation sales surged 44% in Q4, driven by demand for large generator sets and turbines for data center applications. The Power & Energy segment became CAT's largest business by revenue for the first time. The company announced multi-gigawatt power generation orders for data center campuses and is on track to double its large engine capacity by 2030.The companies are also aiming to use AI to boost their own margins and integrate AI into their machines.The macro readTake a step back and think about what these two companies are collectively telling you:Infrastructure spending is real and accelerating. Both companies cite U.S. government IIJA funding, data center construction, and contractor confidence as major tailwinds. Deere's C&F head Ryan Campbell said he's been out visiting customers across geographies and the optimism is broad-based — backlogs are growing and fleet replacement is becoming unavoidable.The ag downturn is stabilizing, not worsening. China resumed buying US soybeans. The $12 billion Farmer Bridge Assistance program is providing near-term liquidity. Fleet age is at elevated levels and the used market is clearing. None of this screams "boom," but it does scream "the worst is behind us."Tariffs are a headwind, but manageable. Deere expects $1.2 billion in tariff costs this year and is roughly price-cost neutral including that burden. CAT faces $2.6 billion in tariff headwinds. Both companies are absorbing it through mitigation, pricing discipline, and production efficiencies rather than passing through outsized price increases.The construction cycle has legs. Between infrastructure mega-projects, data center builds, rental refleet demand, and declining interest rates, this isn't a market that looks like it's about to roll over. Housing remains soft but the rest of the mix is carrying it.Are they expensive? By historical standards, yes. DE trades at roughly 32x trailing earnings. CAT is at about 41x. But both companies are at or near trough earnings with improving order trajectories. If you're buying cyclicals at peak multiples because earnings are depressed and about to inflect higher, that's the textbook playbook.The heavy equipment makers are telling you the same thing the ISM manufacturing data has been hinting at: the industrial economy is stabilizing, AI capex is creating real physical-world demand, and the worst of the ag/construction downturn is behind us.Whether that justifies these valuations at these levels is a different question. But the signal from the order books and about the economy is increasingly clear. This article was written by Adam Button at investinglive.com.

The oil market continues to signal a rising chance of US military intervention in Iran.Oil had been bouncing around in a range of $62-$66 as headlines around Iran shifted the narrative but today crude broke out. It's up $1.34 to $66.53 and has simultaneously broke above the October high.Oil briefly bounced around today when Trump was asked about Iran. The first headlines were that 'goods talks were being had with Iran' and that the US had to make a meaningful deal with Iran. However he added that they needed to make a deal "or something very bad will happen".Trump also put a timeline on action, saying the US will find out "about 10 days". That suggests Iran is facing some sort of ultimatum. Today Russia said it could accept Iran's enriched uranium. Yesterday, I highlighted reports from Israeli media saying they were being told to be ready for war imminently. There is also a WSJ report today emphasizing the military buildup in the Middle East. It says the US has gathered the most air power in the Mideast since the 2003 Iraq invasion.Bloomberg's Javier Blas today spoke with Energy Secretary Chris Wright who dismissed worries about oil prices. Blas writes: If the Islamic Republic feels its survival is at stake, the regional energy industry could become a target...or weeks, Iranian officials have been telegraphing, including via military drills, that oil would be a central part of their response to any attack.Iran pumps nearly 5 million barrels per day with about half exported. Losing that would erase any surpluses in the global market and more. However the long history of the market worrying about Middle East wars boosting oil prices shows a consistent pattern: Buy the rumor, sell the fact. Time will tell but right now there is some momentum to the upside, despite the 10-day wait. Along those lines, the Washington Post is just out with a report saying the US appears ready to strike in Iran.The Trump administration appears ready to launch an extended military assault on Iran, current and former US officials said.It highlighted that officials want to at least wait until after the Olympics. This article was written by Adam Button at investinglive.com.

Canadian Tire reported Q4 numbers today and the read-through on the Canadian consumer is clear: they're still spending and there are no indications of weakness.Comp sales came in at +4.2% across all banners, with SportChek ripping at +9.5% and Mark's up 7.2%. Normalized EPS jumped 38% to $4.47. What's interesting from the call this morning is what CEO Greg Hicks said about spending patterns across income cohorts. The company's internal data shows spend increases across all income levels and debt burdens. The biggest increase in Q4 actually came from the most debt-burdened households — which is either a sign of confidence or a sign they've stopped caring. Either way, wallets are open for now.That said, there's nuance here. The gap between essential and discretionary spending at Canadian Tire's flagship stores is still wide — essentials up roughly 4.7% vs. discretionary at 1.6%. You would like to see that reverse. CFO Darren Myers called them "resilient but discerning," which is corporate-speak for "they'll buy snow tires but they're thinking twice about a hockey stick."On the macro side, management acknowledged the headwinds everyone already knows about: mortgage renewals, geopolitical noise, inflation. But they're buying inventory for growth in 2026 and flagged that Q1 is off to a solid start with winter weather driving sales into February.The one caveat for the bulls: winter weather was a meaningful tailwind in Q4, and the company benefited from an extra retail week worth ~$287 million in sales and ~$40 million in pre-tax income. Strip that out and the underlying growth is still healthy, just not quite as eye-popping.If you're looking for signs of a Canadian consumer rollover, it's tough to find. Notably though, the shares initially opened strongly to the upside but have now reversed and are up just 0.3%.Some are pointing to this:CEO Greg Hicks touted a "conviction that the business should, over the long term, deliver annual retail sales growth of 3% to 5%". But CFO Darren Myers immediately had to throw cold water on that for the upcoming year, explicitly warning analysts: "I think it's clear to everyone that when Greg said the 3% to 5%, it was not a guide for this year".I also noted that the company was highlighting tough H2 comps on weather and patriotic spending around Liberation Day.The loonie is flat today but tomorrow we get the December retail sales report (with Jan advanced numbers). December is expected to show a 0.5%, m/m decline and -0.3% ex autos. The latest spending tracker from RBC was soft with the bank highlighting weather effects. This article was written by Adam Button at investinglive.com.

NQ (Nasdaq Futures) analysis: Energy heats up, Tech cools down as rotation pressure buildsNasdaq futures (NQ) are trading around 24,844, modestly lower on the session. The broader S&P 500 heatmap shows internal divergence rather than broad liquidation, while crude oil futures (CL) are trading near $66.46, up about +2.17% on the day, confirming renewed interest in the energy complex.This is increasingly a rotation story, not a panic story.What the 1-day heatmap revealsTechnology is internally mixed but leaning soft:NVDA -0.94%, AAPL -0.60%, MSFT -0.20%Semiconductor names broadly redGOOG +0.40% and META +0.37% helping stabilize communication servicesFinancials are mostly red, with V -1.04%, MA -1.80%, and WFC -1.51%.Meanwhile:Energy is firm, with XOM +0.79% and CVX +1.18%Utilities and select defensive groups are greenWMT +0.77% holding up on the defensive sideThis confirms selective capital rotation rather than index-wide risk aversion.Confirmed Sector Phase Alerts1) Energy Sector – Heating UpCrude oil is pushing higher today, but more importantly, energy equities are attracting steady participation even when oil has been range-bound in recent sessions.What changed Capital is rotating into energy equities based on cash-flow resilience, dividend yield appeal, and balance sheet strength. This looks like allocation-driven demand rather than short-term speculative trading.Why it matters Energy is benefiting from multiple independent drivers:Relative strength vs growth sectorsNarrative shift toward tangible economy cash flowsYield and income appeal in a more selective marketWho is early vs late Early: Value and yield-focused allocators rotating out of tech into energy. Late: Growth-heavy portfolios still underweight energy vs benchmarks.Phase: Heating UpThis aligns directly with crude’s strength and the positive performance in major integrated names today.2) Technology Sector – Cooling OffWhat changed Relative performance in technology has weakened, especially in semiconductors. Leadership has narrowed, and participation quality has deteriorated compared to earlier cycles.Why it matters This reflects real positioning shifts, not just price noise. Capital appears to be rotating away from high-beta growth and into sectors with earnings visibility and tangible cash flow.Who is early vs late Early: Institutional allocators trimming technology exposure. Late: Momentum and retail investors still overweight mega-cap growth.Phase: Cooling OffThis cooling dynamic is consistent with NQ’s current intraday behavior, where sellers are probing but not yet achieving a full breakdown.Developing Signals3) Financials – Watch for Early AccumulationOversold relative readings suggest potential early accumulation. However, sustained inflows and confirmed leadership have not yet materialized.Phase: Potential Early Accumulation (Unconfirmed)4) Consumer Staples / Defensive – MonitoringInitial rotation interest is visible, but flows are not yet strong enough to confirm a clear phase transition.Phase: Monitoring5) Real Estate / Utilities – Overcrowded Risk WatchSome defensive sectors show extended positioning. While they are benefiting from rotation flows, there is growing risk of temporary crowding.Phase: Watch for Overcrowded ConditionsWhat underlying activity suggests for NQThe sector backdrop explains NQ’s tone:Tech cooling reduces upside momentum.Energy strength supports the broader S&P but does not directly lift Nasdaq futures.Capital rotation is creating internal divergence rather than directional collapse.Recent trading activity shows selling pressure in NQ, but downside follow-through remains limited. Lower levels are being tested, yet not decisively accepted.This is characteristic of rotation-driven weakness, not structural breakdown.Key areas to watch in NQ24,880–24,900: Near-term resistance. A sustained move back above this area would signal stabilization in tech.24,820–24,800: First meaningful support. Acceptance below this zone would confirm deeper cooling in technology.24,750: Next downside reference if semiconductor pressure expands.ScenariosBullish scenario If NQ holds above 24,820 and sector rotation remains orderly rather than expanding into broad risk-off behavior, we could see a rotation back toward 24,900.Bearish scenario If technology weakness accelerates and price begins accepting below 24,800 with sustained participation, the bias would shift more decisively bearish toward 24,750.Market bias score: -2 (slightly bearish)This reflects modest seller advantage in high-beta tech amid confirmed sector rotation out of growth and into energy. It is a lean, not a breakdown call.The score would move more negative if semiconductor weakness broadens and NQ accepts lower levels. It would improve if tech stabilizes and buyers reclaim 24,900 with conviction.What would change the viewSustained acceptance below 24,800Broad red expansion across mega-cap techOr, decisive stabilization in semiconductors and recovery above 24,900This analysis is intended for educational and decision-support purposes only. It is not financial advice. Markets are inherently uncertain, and all trading and investing decisions carry risk.For real-time trade ideas, follow-ups, and market insights across stocks, indices, commodities, and crypto, check out the investingLive Stocks Telegram channel. Trade ideas are shared for educational purposes only and at your own risk.https://t.me/investingLiveStocks This article was written by Itai Levitan at investinglive.com.

Prior was +8530KGasoline -3213K vs -284K expDistillates -4566K vs -1440K expRefinery utilization +1.6% vs +0.4% expThe huge swings in this report continue. This article was written by Adam Button at investinglive.com.

There were weeks of breathless commentary about 5% GDP growth in the US in the fourth quarter and now here we are -- less than 24 hours from the release -- and the tracker has been revised all the way down to 3.0%.The quarter started off with a super-strong trade balance reading for October but it was all smoke and mirrors around pharma exports due to tariffs and that was followed by a normalization of trade flows in Nov/Dec. Now GDP is looking like it will be at 3.0%, which also happens to be the economists' consensus. In light of today's trade balance number and revisions lower in inventories, I see downside risks.In any case, the quarterly numbers so far in 2025 have beenQ1 2025: -0.6% Q2 2025: +3.8%Q3 2025: +4.4%A reading of 3.0% would put annual growth real growth at 2.6% on a Q4/Q4 basis. That's a nice year for the world's biggest economy but it's happening with a deficit at 6% of GDP. You could probably strip 4-5 points off GDP if the US was forced to run a balanced budget.From the GDPNow release:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2025 is 3.0 percent on February 19, down from 3.6 percent on February 18. After this morning’s releases from the US Census Bureau and the US Bureau of Economic Analysis, an increase in the nowcast of fourth-quarter personal consumption expenditures growth from 2.4 percent to 2.5 percent was more than offset by decreases in the nowcasts of fourth-quarter real gross private domestic investment growth from 6.2 percent to 6.1 percent and the contribution of net exports to fourth-quarter real GDP growth from 0.62 percentage points to 0.02 percentage points. This article was written by Adam Button at investinglive.com.

Trump says: We have to make a meaningful deal with IranIt has to be a meaningful deal or something bad will happenConfirms he ordered 22 more B2 bombers ordered to Middle EastWe will find out about Iran in about 10 daysWe may have to take it a step further on IranThere was a kneejerk move lower in oil on this but Trump's words contrast with what he's doing. This headline in the WSJ has oil strongly bid today.The comments are also being reported in two ways. The first was the meaningful deal comment but the second was "meaningful deal or else" and that's a different meaning. That's why oil prices quickly bounced.The 10-day timeline is also notable. There is short-term speculation about action this weekend but I don't think that lines up with negotiations. I also don't think Trump wants to start a war during the Olympics. Next weekend is a different story. This article was written by Adam Button at investinglive.com.