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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 21,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

Markets have wiped out all losses after this morning’s reaction to the CPI report, with all three major indexes, treasury yields, Bitcoin and oil all higher on the week.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Consumer prices rise 0.5% in January, higher than expected as annual rate rises to 3%

Inflation rose more than expected in January, reinforcing the likelihood that the Federal Reserve will delay interest rate cuts.

The Consumer Price Index (CPI) increased 0.5% month-over-month and 3.0% year-over-year, surpassing expectations of 0.3% and 2.9%, respectively. Core CPI (excluding food and energy) rose 0.4% MoM and 3.3% YoY, also above forecasts of 0.3% and 3.1%.

Key inflation drivers:

• Shelter costs (+0.4% MoM) accounted for 30% of the overall increase.

• Food prices jumped 0.4%, with egg prices surging 15.2% MoM due to avian flu, marking their largest increase since 2015.

• Energy prices rose 1.1%, driven by a 1.8% gain in gasoline.

• Used vehicle prices climbed 2.2%, while motor vehicle insurance increased 2%, bringing its annual gain to 11.8%.

With inflation proving stickier than expected, the Fed is likely to maintain its current stance on interest rates longer than previously anticipated.

Markets reacted sharply, with the major indexes declining and bond yields spiking.

Trump readies reciprocal tariffs as trade war fears mount

President Trump is preparing to impose reciprocal tariffs as soon as this week via executive action, reviving a policy from his first term.

The move, championed by Peter Navarro, would match tariffs imposed on U.S. goods by foreign nations, bypassing congressional approval.

The plan could raise tariffs on developing nations like India, Brazil, and Vietnam, as well as developed economies such as Japan and the EU, particularly if they impose nontariff trade barriers like subsidies or restrictive regulations.

While Trump had previously floated a 10%-20% universal tariff, he now appears to favor a targeted approach that adjusts duties based on each country’s trade policies.

Trump also imposed a 25% tariff on Monday on all steel and aluminum imports into the United States with no exceptions or exemptions.

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Earnings: McDonald’s, Coca-Cola, Shopify, and more report results

Earnings season is off to a strong start. Here’s how some of the major companies that reported this week have performed:

McDonald’s shares rose despite missing earnings and revenue expectations, as global comparable sales were better than expected. Here are the key numbers from the report:

• Earnings per share: $2.83 vs. $2.84 expected

• Revenue: $6.39 billion vs. $6.45 billion expected

Coca-Cola shares surged after beating earnings and revenue estimates and providing better than expected guidance. Here are the key numbers from the report:

• Earnings per share: $0.55 vs. $0.52 expected

• Revenue: $11.54 billion vs. $10.68 billion expected

Shopify shares are flat despite beating earnings and revenue expectations, and providing guidance that was in-line with expectations. Here are the key numbers from the report:

• Earnings per share: $0.44 vs. $0.43 expected

• Revenue: $2.81 billion vs. $2.70 billion expected

CVS shares popped after beating earnings and revenue expectations, and providing a relatively strong outlook. Here are the key numbers from the report:

• Earnings per share: $1.19 vs. $0.91 expected

• Revenue: $97.71 billion vs. $97.09 billion expected

*Note - our full breakdown of these reports, as well as several others, will be sent out in Friday’s Earnings Recap.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• Apple teams up with Alibaba to bring AI features for iPhones in China

• Musk-led investor group offers $97.4 billion for OpenAI — Altman declines

• Powell Says Fed Doesn’t Need to Rush on Rate Cuts

• McDonald’s revenue disappoints, as U.S. sales see worst drop since pandemic

• Coca-Cola sales easily top estimates as global demand rises

• CVS shares pop 15% on big earnings beat, even as high medical costs drag down insurance unit

• Shopify beats on fourth-quarter revenue, but gives mixed guidance

• Super Micro stock surges after outlining ambitious 2026 targets, assuring investors it will avoid delisting

• Lyft shares sink 9% on underwhelming fourth-quarter results

• Marriott's full-year profit forecast dampened by China slowdown

• Kraft Heinz Reports Sales Below Analyst Estimates In Q4 Earnings

• BYD shares hit record high after EV maker rolls out driver assistance tech with DeepSeek’s AI help

• ON Semiconductor Corp. Misses Q4 Earnings and Revenue Estimates

• Insurance Giant Humana's Q4 Earnings: 13% Revenue Growth, 2025 Profit Outlook Falls Below Street View

• Monday.com Earnings Beat, Revenue Outlook Strong. Shares Soar.

The Second Half

Earnings season carries on as several major names are scheduled to report, while we get a few notable economic reports to end the week.

Earnings Reports

Earnings season carries and we have a busy next few days as there are 7 companies we cover that will be reporting earnings.

• Wednesday 2/12: Cisco and The Trade Desk

• Thursday 2/13: Palo Alto, John Deere, Airbnb, and Coinbase

• Friday 2/14: Enbridge

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

There will be another key inflation report to watch on Thursday in the PPI report. We also get initial jobless claims and retail sales to end the week.

Here is the full calendar of events scheduled for the remainder of the week:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.