📈CPI better than expected.Stocks Rally!

The CPI data came out and it was significantly better than expected. Core CPI month over month was down .3% versus the estimate of .5%. Why this is important is that energy and food are not included in the Core CPI number. Therefore other items have gotten cheaper for the consumer over the past month. CPI year over year came in at 8.5% versus 8.7%. This shows food and energy have come down in price. It does fit the narrative that we have seen peak inflation. Tomorrow economic release is the PPI and we are looking for .2% month over month. The lower PPI the less producers are paying for goods and theoretically it means less consumers will pay. As for companies earnings we are seeing a specific trend MSFT, NET, TTD all had great earnings. Software names are beating expectations and raising guidance. TTD was up over 35% at one point today. When companies cut back during recessionary times they tend to focus on what they need the most. That is showing itself as software. Semiconductors are more mixed. AMD had great earnings but NVDA stated it is going to miss revenues by 20%. Micron technology confirmed guidance 5 weeks ago only to cut it yesterday. We continue to focus on what is working which is biotech, software and the right retail names. Technically speaking the indexes are at a pivotal spot. The SPY and IWM have gotten above resistance levels but we are not seeing a large push forward. the QQQ are right on the downward trend line and are having a hard time getting through with any conviction. More importantly the VIX, volatility index, has gotten through 20 for the first time since April 5th. This is bullish for equities and shows that we should see less volatility going forward. Overall its going to take a lot of negative news to get the indexes to take out the recent lows. It makes sense to focus a little more now on individual names that are beating earnings expectations and raising guidance. Let’s get to it!

Let’s Look at our Indexes !

Let’s Look at our Stocks!

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