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US Stocks Plummet as January Inflation Report Exceeds Expectations

On Tuesday, US stocks experienced a significant downturn, retreating from recent peaks as investors grappled with a January inflation report revealing a slower cooling of prices than anticipated. All three major indices closed with losses exceeding 1% following the release of the report.

The Dow Jones Industrial Average (^DJI) declined by 1.4%, shedding approximately 500 points, while the S&P 500 (^GSPC) mirrored this drop, following a stumble on Monday as it attempted to sustain its historic rally above 5,000. The Nasdaq Composite (^IXIC), dominated by tech stocks, recorded the steepest decline of the day, finishing 1.8% lower.

The Consumer Price Index (CPI) for January, excluding volatile food and energy components, revealed a 0.4% increase in “core” prices, marking the most substantial monthly rise since April 2023. Despite coming in above economist predictions, the headline CPI showed a 3.1% increase, indicating a slowdown from December’s 3.4% annual rise. In other market movements, the price of bitcoin (BTC-USD) lingered below $50,000 after the cryptocurrency hit this closely watched level for the first time since 2021, marking a noteworthy resurgence.

Oil Prices Drop in Asian Trade as Crude Stocks Surge and Rate Cut Expectations Fade

Early in Asian trading on Wednesday, oil prices took a dip following a report from a U.S. industry group indicating a larger-than-anticipated increase in crude stocks last week. Additionally, investors tempered their expectations for interest rate cuts by the U.S. Federal Reserve. At the market opening at 0000 GMT, Brent futures saw a decrease of 29 cents, or 0.4%, settling at $82.48, while U.S. West Texas Intermediate (WTI) crude futures dropped 22 cents, or 0.3%, reaching $77.65 per barrel.

According to market sources referencing American Petroleum Institute figures released late Tuesday, U.S. crude oil inventories surged by 8.52 million barrels in the week ended February 9, surpassing analysts’ expectations of a 2.6 million barrel increase as per Reuters polls. ING analysts noted that while the crude oil builds were bearish, substantial declines in gasoline and distillate stocks, possibly influenced by BP’s Whiting refinery outage, helped balance the market sentiment. Gasoline inventories plummeted by 7.23 million barrels, and distillate stocks saw a significant drop of 4.02 million barrels, both surpassing analysts’ projections.

The U.S. Energy Information Administration is set to release official data on Wednesday at 1530 GMT. Moreover, recent data indicating sustained U.S. consumer inflation in the preceding month has led investors to believe that Fed policymakers might postpone interest rate cuts, potentially dampening economic growth and oil demand. Consequently, with the postponement of rate cuts, the dollar surged to a three-month peak, typically curbing demand for oil among buyers transacting in other currencies.

Brighthouse Financial (NASDAQ:BHF) Ends 2023 Strong, Announces $250M Stock Buyback and Surpasses Annuity Sales Targets

Brighthouse Financial, Inc. (NASDAQ:BHF) concluded 2023 on a high note, as highlighted in its fourth-quarter earnings call by CEO Eric Steigerwalt, who outlined significant accomplishments and future strategies. Among its achievements, the company executed a notable stock buyback, repurchasing $250 million worth of common stock in 2023 and authorizing an additional $750 million for buybacks. Moreover, Brighthouse exceeded its annuity sales targets, achieving $10.6 billion for the year, while also introducing new annuity and life insurance products. Despite facing a 4% core inflation rate, the company effectively managed expenses, limiting the increase to only 2%. The estimated combined risk-based capital (RBC) ratio remained strong at approximately 420%. Fourth-quarter adjusted earnings reached $177 million, with the annuity segment demonstrating robust performance. Bolstered by a resilient balance sheet and substantial holding company cash reserves, Brighthouse is poised to sustain capital returns to its shareholders. Looking ahead, the company intends to persist with its buyback strategy and anticipates increased surrender activity in 2024 due to maturing business and escalating interest rates.

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