Inflationary gloom

The S&P 500 hovered near all-time highs and the bond market made solid gains after a week of sobering news pointing to the return of rising inflation. A soft reading on retail sales held out some hope that maybe the Federal Reserve would squeeze in a rate cut this year after all. A rally in Treasuries pushed the 10-year yield below 4.5%, with the bond notching its fifth straight week of gains—the longest run since 2021. Money markets are back to fully pricing in a Fed reduction by September—for now anyway.

US retail sales slumped in January by the most in nearly two years, indicating an abrupt pullback by consumers after a spending spree in the closing months of 2024. The value of retail purchases, not adjusted for inflation, decreased 0.9% after an upwardly revised 0.7% gain in December. “The consumer sentiment report showed people were getting nervous and today’s weak retail sales number confirmed it,” said David Russell at TradeStation. “However, the resulting slack is good news for the Fed and tilts the balance a little bit more toward rate cuts.” —David E. Rovella

What You Need to Know Today

What’s the Oracle of Omaha up to? Funny you should ask. Warren Buffett’s Berkshire Hathaway has continued whittling down its longtime bet on Bank of America while keeping a stake in Apple. The conglomerate cut its investment in the bank to 8.9% in the fourth quarter after selling 117.5 million shares, a regulatory filing on Friday shows. Bank of America executives and shareholders have waited months for the update after Berkshire’s prior sales left it with less than 10% and freed it from a requirement to quickly disclose transactions.

The day after being sworn in as the new US secretary of Health and Human Services, Robert F. Kennedy Jr. presided over the firing of 10% of the employees of the Centers for Disease Control and Prevention. The 1,300 fired from the CDC join thousands of others being terminated by the Trump administration this week amid court challenges to the cuts’ legality. The CDC is currently trying to track and contain a wide range of diseases, particularly an outbreak of bird flu. Nearly 70 people in the US have been infected by the bird flu, or H5N1 virus, and one person has died.

Signs of recent bird flu infection were found in three US veterinarians, two of whom had no known prior exposure, researchers said, suggesting potentially wider spread of the dangerous virus than has been suspected. One of the veterinarians worked with cows in Georgia and South Carolina, where no cases in cattle had been reported at the time, according to a study published Thursday by the CDC. Two had no known exposure to infected animals, the report said, and none of the three had influenza-like symptoms or conjunctivitis that are common among most infected people. The firings from the CDC meanwhile come five years after Trump’s controversial response to the coronavirus during his first term, which included his opposition to mask wearing and promotion of fake cures and treatments. That administration’s initial efforts have been blamed for worsening the outbreak’s toll, which at 1.2 million was the worst in the world.

Volodymyr Zelenskiy said he doesn’t want to be remembered as the president who handed Ukrainian land to Russia, which three years ago launched a full-scale invasion of his country. Zelenskiy said he’s prepared to engage with Trump’s initiative to end Russia’s war, but he wants to agree on an approach with allies before confronting Vladimir Putin. “I don’t want to be the person in history who helped Putin to occupy my country,” Zelenskiy told the audience at the Munich Security Conference. Zelenskiy is coming under intense pressure from Trump, who has long expressed admiration of Putin, and Trump’s aides, who reversed American policy by saying Ukraine should forget about getting all of its territory back. The 78-year-old Trump has also suggested Zelenskiy needs to call an election in order to renew his mandate, an idea that, along with comments on why Putin launched his war, echoed Kremlin talking points.

A reckoning that’s been looming for years may have finally arrived. In 2021, more than 354 companies received billion-dollar valuations, achieving what the press calls “unicorn status.” But five years later, only six of them have held IPOs. Four others have gone public through SPACs and another 10 have been acquired (several for less than $1 billion). Others, such as the indoor farming company Bowery Farming and AI health-care startup Forward Health, have gone under. Convoy, the freight business valued at $3.8 billion in 2022, collapsed the following year; the supply chain startup Flexport bought its assets for scraps. So what happened to the rest?

What You’ll Need to Know Tomorrow

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