THE CARA PLAYBOOK — Tuesday, Feb. 10, 2026
Pre-Market Intelligence | Strategic Guidance for Professional Allocators Bill Cara February 10, 2026
PROCESSING NOTE: I am tightening up the workflow. This report will soon be issued daily much earlier in the day.
Playbook Tuesday
Monday’s session extended Friday’s rebound with measured gains (S&P +0.45% to 6,964, Nasdaq +0.90% to 23,239, Dow +0.04% to record 50,136). Late-cycle barbelling confirmed—transports leading third week, Japan surged 3.9% to record on election win, gold broke $5,000. Tech stabilized but differentiation persists: AI infrastructure holding, platforms/software weak. Wednesday’s employment report looms as week’s critical catalyst.
I. OVERNIGHT CONTEXT & REGIME ASSESSMENT
What Happened Overnight • Asia Close: Japan extended election rally—Nikkei +2.5% to fresh record 57,793. Taiwan Semiconductor, SoftBank gaining. KOSPI added gains. China/HK modest. • Europe Mid-Session: Futures edging lower after Monday’s gains. Transports, industrials consolidating. DAX, CAC near unchanged. • US Futures: S&P futures near flat around 6,960 after Monday’s 0.45% gain. Tech holding, yields stable, bitcoin below $70k.
Regime Call: Late-Cycle Barbelling — Intact, Awaiting Employment Data
Monday’s action confirmed rotation thesis rather than reversing it. Capital remains barbelled: pro-cyclicals (transports, industrials, energy, materials) plus defensives (staples, utilities, gold >$5,000) while trimming unprofitable growth. Credit INSTAT scores 80-100 across IG/HY/converts—no systemic stress. This is professional repositioning within resilient fundamentals. Wednesday’s January employment report (consensus ~160K jobs, 4.0% unemployment) will determine if Fed maintains patient stance or recalibrates.
II. PRIMARY MARKET DRIVERS
Rates & Credit US 10-Year consolidating in tight range—consistent with higher-for-longer Fed. MOVE index normalized. Credit spreads constructive across all segments (INSTAT scores maxed at 82-100 for converts, IG, HY). When credit is this healthy during violent sector rotation, it confirms positioning adjustment not recession fears.
Currencies DXY steady. EM FX resilient—MXN +1.0% on day (iShares Mexico +1.0%, now +16.4% YTD), BRL stable, carry trades intact. Yen weakening after Japan election supports measured BoJ normalization narrative. FX stability across DM and EM indicates balanced global growth backdrop.
Commodities Gold’s breakout above $5,000 is the headline—psychological and technical confirmation of hedge demand against real yield volatility and policy uncertainty. Miners following with conviction. Energy firm—XLE +2.0% Monday, +19.1% YTD on OPEC+ discipline and transition capex. Industrial metals stabilizing at healthy levels.
Policy & Event Risk Fed in blackout ahead of March meeting. Markets pricing 42bps cuts for 2025—patient path. Wednesday’s employment report is the catalyst. Strong surprise (200K+) removes easing urgency, pressures duration assets. Weak surprise (sub-100K) raises recession concerns, triggers defensive rotation. Retail sales data Tuesday could provide consumer spending insight. Earnings continue—watch for AI spending/monetization guidance shifts.
