How the Markets Are Digesting Another Hot Inflation Report

The markets are digesting another hot inflation report, and China is putting Lockheed Martin and Raytheon on its sanctions list. Watch TheStreet Today live at 10:30 am Eastern.

The markets are falling as investors digest a hotter-than-expected producer price index report. PPI rose 0.7% in January, higher than the expected 0.4%. 

Jobless claims, on the other hand, fell by 1,000 to 194,000 for the week of Feb. 11. 

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"So, what we are seeing on a daily basis is very likely a pricing in of financial conditions that remain too loose as the FOMC has slowed the trajectory of its upward-moving interest-rate setting policy as the Fed's balance sheet/monetary base/M2 money supply all remain gargantuan relative to pre-pandemic times," Real Money contributor Stephen Guilfoyle wrote in his morning column. 

Outside of the markets, China is taking action against two U.S. defense companies. 

China announced that it will sanction Raytheon and Lockheed Martin. The Chinese Ministry of Commerce placed both companies on the country's unreliable entities list. 

The move comes after China said it would take action in response to the U.S. handling of a suspected Chinese surveillance balloon that was shot down.

The sanctions are in response to weapon sales to Taiwan. The companies are now subject to fines over their Taiwan arms sales dating back to 2020 and senior executives from the companies are now prohibited from entering and working in China.