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Stock market today: US futures muted as investors brace for inflation update

US stock futures took a breather on Monday after closing out a dizzying week at record highs, as investors braced for a looming inflation update that could put that rally to the test.

Futures on the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) wavered below the flatline on the heels of notching new closing highs. Contracts on the Nasdaq 100 (^NDX) were also little changed following a stellar week for tech stocks.

New inflation data in the coming days will test the staying power of the breakout rally that followed Nvidia’s (NVDA) results. A hotter-than-expected CPI report spooked the market and sparked a stock sell-off earlier in February, and investors are already weighing the chances of a surprise in Thursday’s PCE index reading.

Given the PCE index is the Federal Reserve’s preferred inflation gauge, the reading will factor into the ongoing debate on the timing of a rate cut, already pushed back.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

The inflation report is the highlight of this week’s data, with temperature checks on the consumer and manufacturing also on deck. What they say about the health of the US economy may determine whether the bullish mood in stocks continues.

Berkshire Hathaway (BRK-B) closed in on a $1 trillion market value after the Warren Buffett-led conglomerate posted a record annual profit for the second year in a row. In his annual letter to shareholders at the weekend, Buffett said Berkshire is “built to last” and paid tribute to the part played in that by his right-hand man Charlie Munger.

Elsewhere in corporate results, Domino’s Pizza (DPZ) shares popped in premarket after it lifted its dividend and beat fourth-quarter sales estimates.

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    The stunning stats from a broad market rally

    Powered by excitement over AI stocks, the broader market continues to notch some impressive streaks.

    The research team at Deutsche Bank put a few numbers behind all of this ahead of the opening bell today, and it borders on stunning:

    • The S&P 500 has now advanced for 15 of the last 17 weeks. That has only happened one other time in the last 50 years, back in 1989.

    • If the S&P 500 finishes positive again this week, that would make 16 out of 18 positive weeks. The last time that happened was in 1971, shortly before the end of the Bretton Woods system. Achieving 16 out of 18 positive weeks would also be a joint record since the index’s creation, says Deutsche Bank.

    The gains have Deutsche Bank highlighting a few areas where the market rally looks vulnerable.

    One in particular caught my attention before we hear from numerous Fed speakers this week and get a key read on the PCE Index.

    “Inflation persistence could be an issue for markets, as it would mean central banks have to keep rates higher for longer. Indeed, when the US CPI report for January saw an upside surprise, it led the S&P 500 to fall -1.37% that day. So this is a theme that markets are still vulnerable to,” says Deutsche Bank strategist Henry Allen.

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    Key quotes from Buffett’s annual letter

    Priced at $435 in the pre-market amid a 5% post-earnings bump, Berkshire Hathaway (BRK-B) finds itself on the Yahoo Finance trending ticker page. The company will inch closer to the $1 trillion market cap for the first time after closing at $905 billion on Friday.

    Makes sense to me.

    Buffett is cleaning up on his ahead-of-the-curve investments in Japan, is collecting gobs of dividends from Coca-Coca (KO) and American Express (AXP), and is sitting on a record $167.6 billion in cash. Sure Buffett struck a cautious tone to anyone invested in the railroad space (citing tough regulations and intensive capital investments needed), and to a lesser extent those in the energy patch.

    But for me, this was one of Buffett’s best annual letters in a decade because of the sharp investing wisdom he shared to a world currently infatuated with AI stocks like Nvidia (NVDA).

    A couple Buffett reminders to start the week:

    1. “Our goal at Berkshire is simple: We want to own either all or a portion of businesses that enjoy good economics that are fundamental and enduring.”

    2. “At Berkshire, we particularly favor the rare enterprise that can deploy additional capital at high returns in the future. Owning only one of these companies – and simply sitting tight – can deliver wealth almost beyond measure.”

    3. “Though the stock market is massively larger than it was in our early years, today’s active participants are neither more emotionally stable nor better taught than when I was in school. For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.”

    4. One investment rule at Berkshire has not and will not change: Never risk permanent loss of capital.”

    5. “We did not predict the time of an economic paralysis but we were always prepared for one.”

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