DCG Stocks, Option, Crypto - Stock Market & CPI Update - February 12, 2025 - Morning Trading Plan & Market Readiness

Stock Market Overview:

• CPI Data Impact: Inflation data came in hotter than expected with CPI at 3.0% YoY (vs. 2.9% expected) and Core CPI at 3.3% (vs. 3.1% expected). This led to a market sell-off in premarket, particularly in rate-sensitive growth stocks.

• S&P 500 E-mini Futures (ES1!):

  • Hourly Chart: Showing strong resistance at 6,123 and support at 6,020. Price action suggests volatility and a downward trend with target levels at 5,950 and 5,876.

  • Daily Chart: A break below 6,066 could lead to further downside toward the 5,937-5,815 range.

  • Market Sentiment: Bearish short-term, but potential rebounds on support zones.

Crypto Market Overview:

• Bitcoin Trading at $94,985 (-1.12%): Down following higher CPI inflation and less chance of Fed rate cuts.

• Altcoins Mixed:

  • Ethereum ($2,588) -1.83%.

  • Solana ($191.43) -0.18%.

  • Cardano ($0.768) -3.33%.

• Trending News:

  • Trump-backed World Liberty Financial launching crypto reserves (bullish sentiment).

  • Bitcoin miner difficulty at all-time high.

  • Massive $570M USDC minted today—could signal whale accumulation.

  • Grayscale’s XRP ETF decision pending—if approved, bullish for XRP.

  • Major BTC holder KULR increased holdings.

• Trade Plan:

  • Short Bitcoin near $95K resistance if it fails to break above.

  • Accumulate Ethereum if it holds $2,500 support.

  • Look for volatility plays on XRP ahead of ETF news.

  • Monitor stablecoin inflows (USDC) for potential liquidity boost.

CPI Report & Market Reaction

• CPI Data Came in Hot:

  • Headline CPI (YoY): 3.0% (Expected: 2.9%, Previous: 2.9%)

  • Core CPI (YoY): 3.3% (Expected: 3.1%, Previous: 3.2%)

  • CPI (MoM): 0.5% (Expected: 0.3%, Previous: 0.4%)

  • Core CPI (MoM): 0.4% (Expected: 0.3%, Previous: 0.2%)

📌 Key Takeaway: The data suggests inflation is running hotter than expected, reducing the likelihood of Fed rate cuts anytime soon. Markets reacted negatively, with futures dropping sharply, the U.S. dollar strengthening, and bond yields spiking.

• Market Futures Reaction:

  • S&P 500 Futures (-1.0%)

  • NASDAQ Futures (-1.2%)

  • DOW Futures (-0.8%)

  • Bitcoin fell 2.3% to $94,121

  • Gold (-1.1%) at $2,866.36/oz

  • Traders now pricing the first Fed rate cut for December instead of September.

2. Key Market Events

• Trump Calls for Rate Cuts: President Trump has stated that interest rates should be lowered, emphasizing the need for economic stimulus amid upcoming tariffs.

• Sector Focus: Industrials, energy, and consumer goods stocks face pressure from higher inflation, while defensive sectors like healthcare may hold up better.

• Earnings Reports of Interest:

  • $GILD (Gilead Sciences) beats on EPS & revenue; stock up 4.8%.

  • $LYFT reports strong earnings but falls 2% pre-market.

  • $STAA plunges 35.8% after a worse-than-expected earnings loss.

  • $TSLA saw heavy volatility, moving from $320.40 to $335.

  • $UPST gained after JPMorgan and BofA accumulated shares.

  • $CFLT is receiving strong buying interest.

  • $SMCI price target raised by JPMorgan.

• Market Overview

  • Futures: Indicating a modestly lower open, with VIX relatively muted ahead of CPI inflation data.

  • Oil & Metals: Both are down over 1%, contributing to bearish sentiment in commodities.

  • Bonds & USD: Bonds remain flat while the USD is slightly lower.

  • Powell Testimony & Bond Auctions: Fed Chair Jerome Powell’s testimony today, along with 10-year and 30-year bond auctions, will be crucial.

  • Earnings Today: CSCO, APP, EQIX, WMB, TTD, HOOD, HUBS, RDDT, WPM, TYL, PAYC, TEM, BROS, MGM, PEGA.

  • Trump Readies Reciprocal Tariffs: Impact on industrials and trade-sensitive stocks.

3. Market Readiness Plan

Bullish Sectors & Stocks

• Healthcare ($GILD, $BIIB, $ABBV, $XLO): Strong earnings and drug pipeline news.

• Financials ($UPST, $SCHW): Upstart gaining institutional interest; Schwab expands 24/5 trading.

• Tech ($CFLT, $SMCI, $GFS): AI and semiconductor stocks seeing upgrades.

Bearish Sectors & Stocks

• Consumer Staples ($KHC): Lower-than-expected earnings guidance.

• Growth & Tech ($TSLA, $LYFT, $STAA): Inflation concerns hitting high-growth companies.

• Gold & Crypto ($BTC, $GLD): Rising yields and a stronger USD weighing on commodities and digital assets.

Trump Impact Analysis

Bullish Sectors

• Energy: Deregulation benefits WMB, GOLD, and ETR.

• Industrials: Manufacturing boost with tariffs, benefitting WAB, CPA.

• Healthcare: Lower regulatory pressure, benefiting GILD, EW.

• Tech AI: Cloudflare (NET), Amazon (AMZN) remain strong.

Bearish Sectors

• Consumer Goods: Inflation pressuring KHC.

• Transportation: LYFT struggling with competition.

• Imports/Exports: Potential tariffs affecting Japanese and European companies.

Risk Management & Final Plan

• Trade smaller size today due to market volatility post-CPI.

• Watch key support levels for S&P 500 at 6020, 6000, and resistance at 6066-70.

• If the market stabilizes, look for potential bounces in financials and tech AI stocks.

🚨 Recommendation: Stay cautious and trade with tight risk management until the market digests the CPI data.

Today's market is highly reactive to CPI data, causing a risk-off move in equities and crypto. Expect more volatility and potential dip-buying later in the session. Stay defensive in stock trades and trade Bitcoin & Ethereum based on key support/resistance levels.