Key Takeaways
- Canada’s annual inflation rate slowed to 2.3% in January, coming in below the 2.4% estimate and providing the Bank of Canada with more room for potential policy easing.
- Nasdaq 100 futures dropped 1.1% in pre-market trading, weighed down by a 1.7% decline in Alphabet (GOOGL) and a 1% slide in Nvidia (NVDA).
- Masimo (MASI) shares skyrocketed 35% following news that the company will be acquired by Danaher (DHR) for $180 per share.
- USTR Jamieson Greer confirmed steel and aluminum tariffs will remain in place, though the administration may adjust them to ease compliance costs for domestic businesses.
- Geopolitical tensions flared as reports surfaced that Iran refused to allow American officials to join the IAEA delegation for nuclear site inspections.
Canadian Inflation and Wholesale Data
Canada’s Consumer Price Index (CPI) showed significant cooling in January, with the headline Y/Y figure landing at 2.3%, below the expected 2.4%. On a monthly basis, prices remained flat at 0.0%, missing the 0.1% growth forecast. This disinflationary trend was mirrored in core metrics, as the CPI Core-Trim fell to 2.4% against expectations of 2.6%.
In secondary data, Canada’s Wholesale Sales (excluding petroleum) rose 2.0% in December, a sharp recovery from the previous month’s 1.8% contraction. However, international securities transactions saw a significant shift, with a net outflow of $5.57 billion CAD in December, compared to a revised $15.96 billion inflow in November.
US Markets and Manufacturing Outlook
US equity futures signaled a weak open on Tuesday, with the Nasdaq 100 leading the decline with a 1.1% drop. The "Magnificent Seven" stocks were broadly lower in pre-market action, including Apple (AAPL) down 0.3%, Microsoft (MSFT) down 0.7%, and Meta Platforms (META) falling 0.6%.
The NY Empire State Manufacturing Index for February printed at 7.1, beating the 6.2 estimate but showing a slight deceleration from January’s 7.7. Meanwhile, the ADP Weekly Employment Change for the week ending Jan. 31 showed a gain of 10,250 jobs, nearly doubling the previous week's figure of 6,500.
Corporate M&A and Investor Sentiment
Masimo (MASI) was the standout performer in the pre-market, jumping 35% to trade near the $180 acquisition price offered by Danaher (DHR). In the travel sector, Norwegian Cruise Line (NCLH) rose 8% following reports that Elliott Investment Management has built a stake of more than 10% in the company.
A Bank of America Fund Manager Survey revealed that a record number of investors believe companies are overspending. This caution comes as Bloomberg reports that military actions under the Trump administration are being funded by debt rather than tax increases, potentially costing taxpayers billions in the long term.
Trade Policy and Geopolitics
U.S. Trade Representative Jamieson Greer stated on Tuesday that steel and aluminum tariffs will stay in place, emphasizing that the administration does not want "overwhelming compliance costs" but remains committed to the protectionist measures. Greer also noted that the US has restarted wheat shipments to Bangladesh and may adjust metal tariffs to simplify the regulatory burden.
On the geopolitical front, three-way talks regarding Ukraine began in Geneva, according to RIA. However, friction remains in the Middle East as Iran reportedly refused to discuss ballistic missiles or enrichment principles during recent diplomatic efforts, further complicating the prospect of a nuclear deal.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.