For the first time in over two years, core CPI topped headline. Core, which ignores food and gas prices, climbed 0.4% MoM and 5.6% YoY, while headline came in at 0.1% MoM and 5.0% YoY.
Not surprisingly, futures jumped at the news that headline CPI had dropped. But, our charts still show an important risk just ahead.
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It was touch and go on Friday as XLE pushed above its 200-day moving average and WTI smacked into its 50-day. Fortunately for oil bulls and inflation enthusiasts, OPEC+ was watching the same charts and took action.
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Futures are off marginally as the major indices coast into the end of Q1.
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Our yield curve model sounded the alarm on Friday. But, by the end of the day, it had backed off and cooler heads prevailed.
It’s important to recognize, however, that it remains on the bubble, with only a few basis points standing between a rally and another leg down. From a fundamental standpoint, there seems little doubt that the odds of a recession are on the rise.
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Futures have rebounded about 0.5% following yesterday’s roller coaster session that saw SPX backtest its SMA200.
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While the investing world argues whether the FOMC will or should raise rates a whopping 25 bps, the bond market is sending a strong message that markets are on the brink of a significant move.
Futures, drawn higher by the usual pre-meeting meltup, are oblivious.
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How bad will it get? That’s the question slamming markets this morning as Credit Suisse is again in the headlines for all the wrong reasons: The Saudi National Bank has cut them off from further financial assistance. The CDS have soared and the stock is getting ever closer to zero.
Futures were essentially flat after a very nice rebound yesterday – until the news hit. Now, they’ve given up essentially all of yesterday’s gains and some important technical support.
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Last week completed the backtests we’d been expecting, with ES, SPX, COMP, DJIA and NKD all holding important technical support.
While the fundamental picture might not justify these prices, the algos are satisfied. And, until price discovery reemerges (if it does), the algos are all that matter.
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Futures have dropped back through the 50-day moving average, putting the 200-day back in focus after yesterday’s near miss.
We’re essentially in the same situation as yesterday except that we’re jumping off from a much lower level.
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The FOMC’s meeting gets underway today. Like most, this one seems very consequential. The Street is divided on whether or not the Fed has done enough to combat inflation as well as the necessity of a recession.
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