Did inflation peak? The CPI month over month estimate, which determines the rate of inflation, came in at .3% versus .5% estimate. This is the slowest growth in the CPI in two years. Goldman Sacs issued a statement “In the U.S., we do think that inflation is peaking right about now,” Lakdawala-Flynn, co-head of global private wealth management at the bank. “We think the probability of a recession has increased in 2023. Within equities, we’re recommending that our clients have exposure to names that have pricing power, that have strong margins” Essentially this fits our focus on Energy and Fertilizers stocks. Today on CNBC Fed Gov. Christopher Waller stated “I’m forecasting that this is pretty much the peak, it is going to start to come back down.” Let’s look at how the markets reacted over the past two days. The 10 year bond rallied to the 2.68% from a 2.77% high. During the same time the VIX came down 10%. The VIX is the volatility index and determines whether or not investors are buying insurance on the equity markets. today we saw a rally in the homebuilders and technology sector. Both would benefit from inflation stabilizing and dropping. For now the jury is out for whether or not it peaked. What is important is the technical action we saw in the indexes. Leaders such as AAPL AMZN TSLA closed over the 5 day moving average for the first time in well over a week. This coupled with the SPY and QQQ sitting right below the 5 day leads us to believe a short term rally is possible. We are going into a shorter week. Usually we see investors active in the morning and then slow down as t he day progresses. My immediate focus will be on the SPY and QQQ and if they get over the 5 day. I will also be focused on the 10 year as it broke the 5 day for the first time since the sell off began. Let’s get to our charts!
Did Inflation Peak?
Did Inflation Peak?
Did Inflation Peak?
Did inflation peak? The CPI month over month estimate, which determines the rate of inflation, came in at .3% versus .5% estimate. This is the slowest growth in the CPI in two years. Goldman Sacs issued a statement “In the U.S., we do think that inflation is peaking right about now,” Lakdawala-Flynn, co-head of global private wealth management at the bank. “We think the probability of a recession has increased in 2023. Within equities, we’re recommending that our clients have exposure to names that have pricing power, that have strong margins” Essentially this fits our focus on Energy and Fertilizers stocks. Today on CNBC Fed Gov. Christopher Waller stated “I’m forecasting that this is pretty much the peak, it is going to start to come back down.” Let’s look at how the markets reacted over the past two days. The 10 year bond rallied to the 2.68% from a 2.77% high. During the same time the VIX came down 10%. The VIX is the volatility index and determines whether or not investors are buying insurance on the equity markets. today we saw a rally in the homebuilders and technology sector. Both would benefit from inflation stabilizing and dropping. For now the jury is out for whether or not it peaked. What is important is the technical action we saw in the indexes. Leaders such as AAPL AMZN TSLA closed over the 5 day moving average for the first time in well over a week. This coupled with the SPY and QQQ sitting right below the 5 day leads us to believe a short term rally is possible. We are going into a shorter week. Usually we see investors active in the morning and then slow down as t he day progresses. My immediate focus will be on the SPY and QQQ and if they get over the 5 day. I will also be focused on the 10 year as it broke the 5 day for the first time since the sell off began. Let’s get to our charts!