It Doesn’t Add Up

Over the past few years, the “market” has developed a knack for rising in spite of disappointing economic news.  Before CPI reached 2.5%, we usually characterized it as “bad news is good news.”  In other words, a moribund economy increased the odds of maintaining or even expanding the most accommodative monetary policy of all time. But, inflation … continue reading →

Crossroads Ahead

The interplay between USDJPY and oil has been fascinating to watch.  The yen carry trade used to be the primary driver of algos and, thus, equity prices.  But, CL officially took over on Feb 11, 2016 and, despite the inflation complications it has engendered — not to mention a bearish channel breakdown and some of the worst … continue reading →

Another OPEX

Yesterday morning started out promising for bears.  But, the downdraft in CL that allowed a 13-pt decline in SPX was quickly erased.  From then on, SPX had a great deal of difficulty reaching even obvious levels of support.  Instead, we saw yet another insufferable meltup. CL took the opportunity to gap higher overnight.  So, what does … continue reading →

More of the Same?

Did you like yesterday?  We have futures off 4-5 points this morning on higher inflation (+2.5% yoy), lower real earnings (-0.5% mom), surging oil inventories, hawkish Fed testimony, etc.  But, we also have retail sales and Empire Fed popping and, of course, another day of Yellen testimony.  So, a mixed bag. The one key difference … continue reading →

Ready for Inflation?

With an economy bumping along, stagnant in most respects, and inflation on the rise, it’s getting harder and harder to avoid the stagflation diagnosis.  Let’s see what Ms. Yellen comes up with later this morning. For those who missed it, PPI was up a blistering 0.6% last month — largely on the sharp rise in energy … continue reading →