Thursday's big stock stories: What’s likely to move the market in the next trading session

Oracle shares continue their robust performance, gaining an additional 1% after a 36% surge Wednesday to a new record high, having doubled year-to-date. Investors are keenly awaiting Thursday's CPI data, projected to show a 0.3% monthly and 2.9% annual increase, amidst a notable decline in Treasury yields across maturities over the past three months. Additionally, earnings reports from Kroger and Adobe will provide insights into the consumer staples and software sectors, while the crypto market anticipates Gemini's public debut on Nasdaq Friday, following substantial year-to-date gains across various crypto-related equities and digital assets.

Analysis

The market is positioned for a pivotal session, centered on the upcoming CPI inflation report, which is forecast at 2.9% year-over-year. This economic data point arrives against a backdrop of significantly declining Treasury yields over the past three months, with the 2-year yield down 12% and the 10-year down 11%, suggesting bond market participants are pricing in a disinflationary environment. Within equities, a stark divergence is evident in the technology sector. Oracle (ORCL) is displaying exceptional momentum, surging 36% to a record high and doubling in value year-to-date, making it a top-five performer in the S&P 500. This rally has persisted despite mixed earnings reported in December, indicating powerful sentiment-driven trading. Conversely, Adobe (ADBE) faces its earnings report from a position of weakness, having fallen nearly 16% since its last quarterly update and trading 40% below its 52-week high. In the consumer space, Kroger's (KR) results will provide insight into grocery sector health, with its stock up a modest 2% since its last report. The digital asset space shows broad strength, with Riot Platforms (RIOT) up 60% year-to-date and hitting a 52-week high, alongside double-digit gains for Bitcoin and Ether. The upcoming public listing of the Gemini crypto exchange on Friday serves as a key near-term catalyst and sentiment indicator for this sector.

Key Decisions for Investors

• Given the significant decline in Treasury yields preceding the CPI release, investors should evaluate their portfolio's rate sensitivity, as any deviation from the 2.9% YoY forecast could trigger sharp repricing in both fixed income and equities.
• Following Oracle's parabolic 36% gain to a record high, investors holding the stock should consider trimming positions or implementing risk management strategies to protect gains from potential short-term pullbacks or increased volatility.
• For Adobe, the stock's pronounced underperformance creates a high-stakes earnings event; traders could look at options to define risk on speculative positions or hedge existing exposure against a significant post-release move.
• The upcoming Gemini IPO and strong year-to-date performance in crypto-related equities like Riot and Coinbase signal robust sector momentum, warranting attention to a potential 'sell the news' reaction post-listing on Friday.
• Kroger's earnings report should be monitored closely for management commentary on consumer behavior and margin pressures, as it will be a key barometer for the defensive consumer staples sector.