Retail Sales Beat Supports Fed Hawks

The FOMC hawks should gain an edge with Lael Brainard’s departure to NEC, a factor not lost on the markets following yesterday’s MoM CPI beat and this morning’s Retail Sales beat (+3.0% vs +1.9% exp.) The 10Y continues to edge higher after breaking out last week.Note that SPX’s recent cycle high occurred on the very day its SMA50 topped its SMA200 – a Golden Cross that is supposed to usher in higher prices. The fact that it hasn’t means that this rally is just like so many others: bailing out the market makers who would otherwise be crushed under overly bearish options positioning.