Five Numbers to Close Out February
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Five Numbers to Close Out February
"The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function." — F. Scott Fitzgerald
Core Producer Prices Just Posted Their Hottest Month Since July
Friday's PPI report landed like a cold shower. Core producer prices (stripping out food and energy) rose 0.8% in January, nearly triple the 0.3% economists expected. The largest monthly jump since last summer. The headline number wasn't great either: final demand PPI climbed 0.5%, driven almost entirely by a surge in services costs. A 14.4% spike in margins for professional and commercial equipment wholesaling suggests companies are passing tariff costs straight through. The kicker: several PPI components feed directly into the Fed's preferred inflation gauge, core PCE, which now looks likely to come in uncomfortably hot when it's released on March 13th.
Source: Bureau of Labor Statistics — Producer Price Index, January 2026
The 10-Year Treasury Yield Broke Below 4% — Despite Hot Inflation
Here's the paradox: inflation data came in hot, and bonds rallied anyway. The 10-year Treasury yield fell to 3.96% on Friday, its lowest level since November and down roughly 25 basis points for the month. What's going on? Fear most likely. Investors are rotating into safe-haven assets as AI disruption fears hammer equities, private credit wobbles, and Middle East tensions simmer. The bond market is telling you it's more worried about a slowdown than a re-acceleration of inflation. Whether that bet is right is another question entirely.
Source: CNBC / U.S. Treasury Department
Companies Are Buying Their Own Stock at a Record February Pace
Corporate America may be nervous about the economy, but it's very confident about its own share prices. Buyback authorizations surged to $233.3 billion in February. The largest February on record and the third-biggest month ever, according to Birinyi Associates. Salesforce alone announced $50 billion. Walmart added $30 billion. Dell piled on $10 billion after blowout earnings. Year-to-date authorizations have already hit $327 billion, ahead of last year's pace. Analysts project companies will complete $1.3 trillion in repurchases this year. It's a massive floor of corporate demand propping up a market that otherwise can't seem to find its footing.
Source: Birinyi Associates / CNBC
Private Credit Defaults Are Climbing — and the Worst-Case Scenarios Are Getting Worse
The $1.8 trillion private credit industry had a rough February. Fitch pegs the default rate at 5.8% as of January, and UBS warned this week it could reach 15% if AI disruption hits software borrowers hard. That matters because software companies account for roughly 40% of all PE-backed loans. Blue Owl Capital, one of the sector's biggest names, saw its stock fall 23% this month after halting redemptions from a tech-focused fund. Then a UK mortgage lender backed by Barclays and Apollo collapsed into insolvency amid fraud allegations. JPMorgan's co-CEO of investment banking put it bluntly: "I'm shocked that people are shocked."
Source: Fitch Ratings / UBS / Bloomberg
Dell's AI Server Backlog Is Now Larger Than Ford's Annual Revenue
Lost in Friday's market gloom was one of the most impressive earnings reports of the quarter. Dell posted record revenue of $33.4 billion for fiscal Q4, up 39% year-over-year, and its stock surged more than 20%. But the number that really jumped off the page was the AI server backlog: $43 billion, with $64 billion in total AI orders placed during the fiscal year. For context, that backlog alone is larger than Ford Motor Company's most recent annual revenue. Dell guided for $50 billion in AI server revenue next year — double this year's figure. Not every AI story is about job losses and software implosion. Somebody has to build the hardware, and right now, Dell is printing money doing it.
Source: Dell Technologies — Q4 FY2026 Earnings Release