THE BRRR’s BOTTOM LINE
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The CPI delivered a Valentine's Day gift to the bulls this morning. January inflation came in at 2.4% — beating expectations of 2.5% and marking the lowest reading since May. Core inflation dropped to 2.5%, the coolest since March 2021. Markets loved it: futures flipped green, Treasury yields dropped, and June rate cut odds jumped from 66% to 70%.
The reaction tells the story. After yesterday's tech bloodbath (Nasdaq -2%), the indexes are positive. The 10-year yield fell to 4.09% from 4.11%. This is the "soft landing" data the Fed has been waiting for — inflation cooling while the job market stays strong. Oxford Economics called it "a welcome surprise to the downside."
But here's the real story: Bitcoin has bumped up to $69K (+3.5%) while equities are more muted. The correlation breakdown between crypto and stocks may be starting — BTC is acting like digital gold, not tech beta.
The question now is whether this week’s data becomes the pivot point — traders are betting yes.
MACRO
SPX: $6,877 (+0.63%) | DXY: 96.93 (flat) | 10Y: 4.09% (-0.5%) | Gold: $5,018 (+1.6%)
CPI beats expectations at 2.4%, lowest since May. Markets exhale as June rate cut odds jump to 70%. Gold breaks $5K milestone.
CPI Victory Lap: Headline inflation at 2.4% YoY (exp 2.5%), down from 2.7% in December. Core at 2.5%, lowest since March 2021. "A welcome surprise to the downside" — Oxford Economics.
Fed Pivot Back On: June rate cut odds jumped from 66% to 70% after the print. Fed officials still cautious but this gives them cover to ease.
Yields Tumble: 10Y at 4.09% (down from 4.11%), 5Y down 0.65%. Bond market buying the soft landing narrative hard.
TECH
META: $650 (-0.2%) | TSLA: $420 (+0.8%) | NASDAQ: 24,882 (+0.6%)
The Magnificent 7 just committed $680 billion to AI infrastructure in 2026. The question isn't IF they're spending — it's whether the returns justify the burn.
• The Capex Scoreboard: Amazon leading at $200B, Alphabet $175-185B, Microsoft $120-144B, Meta $115-135B. Combined Mag7 spend jumped from ~$400B last year. This is the biggest infrastructure buildout since the railroads — and Nvidia collects 40-50% of every dollar spent.
• DeepSeek Anniversary: One year since China's DeepSeek wiped $593B off Nvidia in a single day. Now OpenAI is accusing them of "distilling" US models to leapfrog restrictions. The AI cold war is heating up — Washington worried China is catching up despite chip bans.
• Microsoft's OpenAI Problem: Post-earnings selloff driven by "OpenAI concentration risk" — too dependent on one partner. Analysts now calling it a Strong Buy on the dip. The irony: MSFT is getting punished for being TOO successful at AI partnerships.
• Who's Actually Winning: Memory chip maker Kioxia is 2026's best performing major stock (not a Mag7). The pick-and-shovel plays are crushing it while the spenders get questioned on ROI.
CRYPTO
BTC: $69,003 (+3.56%) | ETH: $2,059 (+5.7%) | SOL: $84.16 (+7.5%)
Crypto outperforms tech for first time in months. BTC holding $69K while Nasdaq muted — the digital gold thesis is alive.
Coinbase Q4 Miss: Revenue $1.78B and EPS $0.66 both missed estimates, with a $667M net loss driven by unrealized crypto investment write-downs — but stock jumped anyway on $1.7B buyback and CEO calling the slump "psychological."
$65K Support : After falling during each of the first four days of the trading week, BTC found support at $65k ahead of this morning’s CPI and rallied as high as $69.5k.
Fear & Greed: 9: Extreme Fear readings historically mark bottoms, not tops. Contrarian signal flashing green.
Soft CPI = Risk On: Lower inflation means looser financial conditions ahead. That's bullish for hard assets across the board.
GEOPOLITICS
Tensions: EU/US rift widens | Ukraine deal pressure | Tariff theater continues
Munich Security Conference kicks off today with transatlantic relations at lowest point in decades. Europe scrambling for "strategic autonomy" as Trump reshapes the world order.
• Ukraine Peace Pressure: US ramping up pressure on Kyiv to accept a deal before midterms. Trump administration wants concessions on territory and elections. Zelensky caught between Russian aggression and American impatience.
• Europe's Wake-Up Call: Munich Security Conference report warns of "wrecking-ball politics" era. Germany's Merz floating a European nuclear shield. France pushing for EU defense autonomy and buy-European mandates. The post-WWII order is being rewritten in real-time.
• Rubio Warning: Secretary of State told Europeans point-blank they may not remain "reliable allies" — unprecedented language that has NATO capitals scrambling.
ECONOMIC CALENDAR
Feb 13: 8:30 AM ET: January CPI — DONE (2.4% vs 2.5% exp)
Feb 14: Retail Sales + Industrial Production
Feb 19: FOMC Minutes
Feb 28: PCE Inflation (Fed's preferred gauge)
Mar 18-19: Next FOMC Meeting
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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.
