Good morning investors! Stocks appear to be getting better but the big job report may change things today.
Today we cover:
US retail sales
Finance stocks suffer
Earnings
📊 Economy and News
US Retail Sales Flat in December, Signaling Consumer Weakness
U.S. retail sales unexpectedly remained unchanged in December, missing economists' forecast of a 0.4% rise, following a 0.6% increase in November. Households cut back on big-ticket items like motor vehicles (-0.2%), furniture (-0.9%), electronics (-0.4%), and clothing (-0.7%). Core retail sales (excluding autos, gas, building materials, and food services) dipped 0.1%.
The Commerce Department revised October sales lower (to -0.2%). Year-over-year, sales rose 2.4%. Weakness was linked to rising living costs from import tariffs, a softening labor market, sluggish wage growth (0.7% quarterly, 3.3% annually), and consumer fatigue. The saving rate hit a three-year low of 3.5% in November, highlighting a "K-shaped" economy where upper-income households drive spending via asset gains, while lower-income ones struggle.
Economists downgraded Q4 GDP estimates (Atlanta Fed to 3.7% from 4.2%). Frigid January weather and potential savings from Trump's tax refunds may further impact growth, though some expect a rebound later. The Fed is likely to hold rates steady, with possible cuts later in 2026 as labor costs cool (ECI up 0.7% quarterly, 3.4% annually).
This points to slower consumer spending and economic momentum entering 2026.
Global hits:
Germany’s auto industry faces investment exodus as firms cut jobs.
Brazil’s annual inflation slightly up in January, still backing easing outlook.
BofA lifts Taiwan 2026 GDP growth forecast on AI-driven boost.
China’s central bank promises financial support to boost domestic demand.\
Household credit: U.S. household credit issues rose modestly in Q4 2025 but stayed low overall. Total delinquency rates climbed to 4.8% (from 4.5%), with serious delinquency flows across all debt hitting 3.3%.
Mortgages remained strong historically (1.4% serious delinquency transition rate), though troubles accelerated in lower-income and weaker labor/housing regions.
Student loans were the weakest category, with 9.6% seriously delinquent and a 16.2% flow into serious delinquency after pandemic forbearance ended.
Total household debt reached $18.8 trillion (+$191 billion QoQ), led by credit cards (+$44 billion to $1.3 trillion), auto loans (+$12 billion to $1.7 trillion), and student loans (+$11 billion to $1.7 trillion).
The data underscores a divided economy: higher-income households continue driving growth via asset gains, while lower-income borrowers face mounting pressure from slowing jobs and high costs.
Reminder: U.S. law firms see profit surge in 2025, but M&A slowdown signals caution. Elsewhere, BP suspends share buyback plan in fresh sign of oil price pressure. Lastly, UBS downgraded its outlook on U.S. IT stocks.
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NetPicks
Disclaimer: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT ADVICE. NetPicks Services are offered for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation or be relied upon as personalized financial advice. We are not financial advisors and cannot give personalized advice. There is a risk of loss in all trading, and you may lose some or all of your original investment. Results presented are not typical. Please review the full risk disclaimer: https://www.netpicks.com/terms-of-use-conditions-of-sale/
📈 Stocks
S&P 500 6,941.81 (-0.37%)
DJIA 50,188.14 (+0.14%)
NASDAQ 23,102.48 (-0.57%)
BRENT CRUDE 68.74 (+1.54%)
* Prices as of Feb 11th, 12:20 AM UTC
AI Tax Tool Sparks Selloff in Financial Stocks
Altruist launched an AI-powered tax planning feature in its Hazel platform on February 10, 2026, enabling advisors to generate personalized tax strategies in minutes by analyzing clients' 1040s, paystubs, statements, notes, emails, and other data.
The announcement triggered fears of AI disruption in wealth management, causing major financial stocks to drop sharply: LPL Financial fell 8.31%, Charles Schwab 7.42%, Raymond James Financial 8.75%, and Morgan Stanley 2.4%.
This mirrors earlier 2026 declines in software stocks due to AI advancements threatening traditional services and margins.
The iShares U.S. Broker-Dealers and Securities ETF declined 3.13% that day. Investors worry AI could automate profitable advisory functions or erode established firms' advantages.
Interesting: Alphabet’s debt sale is set to top $30 billion. The company increased the size of the offering, which had been expected to land at $20 billion, as investor demand strengthened.
EPA will revoke ‘endangerment finding’ that underpins all climate regulation this week.
Surprising: Estée Lauder sued Walmart over allegations it had counterfeit La Mer, Le Labo, Clinique, Aveda and Tom Ford beauty products.
Earnings:
Ford Motor reported its first quarterly miss since 2024 and its largest quarterly earnings miss in four years. The earnings miss was largely due to unexpected tariff costs of roughly $900 million related to credits for auto parts not taking effect as early as expected.
Philips posted comparable order intake growth of 6% and returned to profit following a net loss in 2024. It issued fresh guidance for 2026, saying it now expects comparable sales growth to fall in the range of 3% to 4.5%.
Coca-Cola reported weaker-than-expected quarterly revenue, falling short of Wall Street’s projections for the first time in five years. However, demand for its drinks in North America and Latin America is beginning to show signs of improvement. Looking ahead to 2026, the company is projecting organic revenue growth of 4% to 5% and comparable earnings per share growth of 7% to 8% for the full year.
Kering said it expects a return to growth this year even as it posted another quarter of sales declines , with its biggest sales driver, Gucci, continuing to lag in new CEO Luca de Meo’s first quarter at the reins. The company, which also owns brands Yves Saint Laurent, Bottega Veneta and Balenciaga, said fourth-quarter sales fell 3% on a comparable basis to 3.9 billion euros ($4.64 billion), a slight beat.
💵 Personal Finance
How to Stop Your Money from Losing Value
Money loses value primarily through inflation, which erodes purchasing power over time. If your cash sits idle earning little or no interest, it buys less in the future. In 2026, with economic shifts and potential policy changes, protecting your wealth requires proactive steps. Here are practical strategies to preserve and potentially grow your money's real value.
1. Move Beyond Low-Yield Savings Accounts
Keeping large sums in traditional savings accounts often fails to keep pace with inflation. Seek higher-yield options like high-interest savings accounts, certificates of deposit (CDs), or money market accounts. Use laddering—spreading investments across different maturities—to balance liquidity and better rates. This ensures portions mature regularly, allowing reinvestment at potentially higher yields while reducing reinvestment risk.
2. Invest in Inflation-Protected Securities
Treasury Inflation-Protected Securities (TIPS) directly combat inflation. Their principal adjusts with the Consumer Price Index (CPI), rising during inflationary periods, and they pay interest on the adjusted amount. Series I Bonds (I Bonds) offer similar protection with a fixed rate plus an inflation component. These government-backed options provide reliable hedges, especially for conservative investors or short- to medium-term needs.
3. Build a Diversified Investment Portfolio
Historically, stocks outperform inflation over the long term. Keep money invested in a balanced mix of equities, focusing on companies with strong pricing power (e.g., those that can raise prices without losing customers). Add real assets like real estate investment trusts (REITs), which often generate rental income that rises with inflation, or commodities (energy, metals, agriculture) that tend to appreciate when prices climb. Diversification across asset classes reduces risk while aiming for returns above inflation.
4. Pay Down High-Interest Debt and Optimize Spending
Debt with variable rates worsens during inflation as payments rise. Prioritize paying off credit cards or adjustable loans to free up cash flow. Track expenses to cut unnecessary costs—small savings compound over time. Use rewards credit cards strategically for everyday purchases to offset some rising prices.
5. Consider Real Assets and Income-Generating Investments
Own tangible assets like property or invest in sectors tied to essentials (healthcare, utilities). Dividend-paying stocks from stable companies provide growing income streams. For broader exposure, alternatives like infrastructure funds offer inflation resistance with low correlation to stocks and bonds.
Final Thoughts
No single method eliminates inflation risk entirely, but combining these—higher-yield cash, inflation-linked bonds, diversified growth assets, and smart debt management—helps your money retain or increase purchasing power. Assess your risk tolerance, time horizon, and goals; consult a financial advisor for personalized advice. Staying invested thoughtfully, rather than hoarding cash, is often the strongest defense in an inflationary environment.
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