DC Lite #546

1. PPI (II). "Final demand trade services surged 2.5% in January. This is a warning that inflationary pressure has built up in the distribution chain. Producers have increased prices above costs, which means they have room to pass on the costs of tariffs down to buyers."

2. Money supply. "M2 growth in the year ending January '26 was a mere 3.6%. In normal, pre-Covid times, most economists would predict that 3.6% M2 growth would lead to a slowdown in economic growth and a decline in inflation. Yet today the chatter is all about whether inflation is going to rise. This could be one of those times when the market is caught looking in the wrong direction."

3. Construction spending. "The US now spends basically as much on data center construction as on office construction".

4. XLE flows. "Gotta love a decade-plus breakout but XLE flows represent a tactical risk to the energy trade. Most one-month inflows since 2008".

5. Mag 7 vs. 200DMA. The Mag 7—proxied here by $MAGS—closed below the 200-day moving average for the first time since May'25, ending its streak at 200 days.

ICYMI