Feb 12th Pre-Market

Good morning.

Futures are up after yesterday's jobs beat faded into a flat close.

Jobless claims just came in at 227K versus 222K expected highest since early February. Yesterday's 130K jobs beat is already looking shaky.

Tomorrow's CPI print matters more than anything else this week.

Let’s dig in…

Today's Big Picture

1. Jobs Beat Clouds The Rate-Cut Picture 
The economy added 130,000 jobs in January, nearly double the 70,000 expected. Unemployment dipped to 4.3%. Good news for the economy, bad news for rate-cut hopes. Treasury yields had their biggest one-day move since late October.

2. Global Markets Leave The U.S. Behind 
Europe and Asia are hitting new records while the S&P sits slightly green flat. France's CAC 40, the Euro Stoxx 50, the Swiss Market Index, South Korea's Kospi, and Japan's Topix all hit fresh highs Thursday. The Dow topped 50,000 last week and hasn't gone anywhere since.

3. Trump And Xi May Roll Back Tariffs
The South China Morning Post reported the U.S. and China may unwind tariffs for up to a year. If true, this changes the calculus for every multinational watching margins compress. Mercedes-Benz $MBG just flagged $1.2 billion in tariff costs for 2025 alone.

Market Overview

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Stock Spotlight (pre-market)

Cisco $CSCO ( ▼ 0.87% ) 
Revenue beat on hyperscaler AI demand. Margins missed. New AI chip targets Nvidia directly. Enterprise spending commentary tonight matters more than the numbers.

McDonald's $MCD ( ▼ 0.85% ) 
Same-store sales beat. Value campaign is working. Consumers are pinched but still coming through the drive-thru. One of the few consumer bright spots this week.

Apple $AAPL ( ▲ 0.67% ) 
Only major phone brand to grow in China in January. iPhone sales up in a market that fell sharply. Meaningful data point for anyone watching the China narrative.

Meta $META ( ▼ 0.3% ) 
Sold over 7 million AI glasses in 2025 through EssilorLuxottica $EL. Triple the combined total from 2023 and 2024. Smartglasses aren't a gimmick anymore.

Shopify $SHOP ( ▼ 6.7% ) 
Moffett Nathanson upgraded to Buy, $150 target. Vibe coding fears crushed the stock unfairly — Shopify isn't really a software company. I think they're right.

MercadoLibre $MELI ( ▼ 0.35% ) 
JPMorgan upgraded to overweight after a year of flat performance against a LatAm index that ripped. Shopee raised take rates last week. Competition is cooling. Under-owned and setting up.

What to Watch

CPI Data — Friday
This is the week's main event. Expected to show consumer prices grew at a 2.5 annual pace in January. If it comes in tame, the market can digest strong jobs without panicking about inflation. If it's hot, rate cut hopes take another hit.

Applied Materials Earnings — Today After Close 
The biggest chipmaking equipment name reports tonight. Investors want to see whether AI capex is translating into equipment orders or if the cycle is peaking.

Existing Home Sales — Today 10 AM ET 
Expected at 4.15 million annualized, down from 4.35 million. Housing remains stuck between high rates and low inventory.

Thanks for reading 🙂

- John

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