PPI came in at 0.4% MoM versus 0.3% consensus, confirming yesterday’s hotter than expected inflation outlook.

Futures initially dipped, though not as much as yesterday. But, like yesterday, VIX was quickly hammered back down to recent lows, reviving equities before the opening bell.

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Jan CPI rose 3% YoY and 0.5% MoM, in line with our expectations but higher than consensus. Core CPI rose even more, reaching 3.3% YoY.  PPI will be released tomorrow.

Futures are off sharply.

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GC’s approach to our 3012.80 target from last April [see: Update on Gold and Silver, April 17 2024] reminds us that we’re not the only analysts concerned about tomorrow’s CPI print.

As we’ve discussed for the past several months, Jan CPI should surprise to the upside. Will it be enough of a surprise to disrupt the euphoria surrounding stocks?

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Futures are up moderately as algos react to a VIX smackdown that more than offsets the latest tariff troubles and fading corporate euphoria. It remains to be seen whether the market can hold up after higher than expected inflation is reported on Wednesday.

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Nonfarm payrolls for January came in at 143K versus 175K expected, though average hourly earnings were +0.5% versus estimates of +0.3%. This was on top of a disappointing outlook for AMZN, currently off almost 3% in the after hours.

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Futures are up modestly after mixed economic data: hotter than expected productivity and unit labor, but higher than expected initial claims.

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Last night was perhaps the strangest yet of Trump 2.0. The US is going to somehow “take over” Gaza and develop it as a resort? Right…

This was on top of disappointing earnings for both Alphabet and AMD. So, it’s only fitting that our power is out this morning too.

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Shortly after insisting that there was nothing which could prevent tariffs against Canada and Mexico, Trump called off the tariffs.

No amount of political or diplomatic pressure had worked. But, the market – which Trump dearly cares about – called BS on the assertion that tariffs aren’t inflationary.

The S&P500’s 2% gap down was apparently more convincing than scores of economists.

At this point, we’re left with the expectation of a 10% tariff on some Chinese imports and vague rumblings about tariffs on European imports.

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Futures are off sharply as investors run the numbers on the effects of a 25% tariff on goods from Mexico and Canada.  As we’ve been warning, tariffs will positively ratchet up inflation which will, in turn, prevent the FOMC from cutting rates any time soon.

The one caveat: as equity markets tank, funds will of course flow from stocks into bonds – thus forcing interest rates lower as a fear trade. continued for members… (more…)