pebblewriter

Tag: cpi

  • FOMC Day: Nov 2, 2022

    The market is essentially unchanged from yesterday, with VIX in a position to make or break this rally unless the FOMC delivers a significant surprise.

    We’ve seen this movie before: a sharp rally into a Fed meeting or CPI report that wipes out the put buyers and positions the market for a drop from a higher price level once the disappointing news is delivered.

    There is widespread expectation of a 75 bps hike, but less agreement about whether the FOMC will be as dovish as the market’s latest rally would suggest.

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  • Algos: Ready for FOMC

    In yet another reminder of their sway over the markets, the algos have brought stocks to the brink of a breakout by putting VIX at the brink of another breakdown.

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  • Fed Meeting on Deck

    It’s unusual for stocks to sell off in the lead up to an FOMC meeting. Its also unusual for a bearish pattern such as a Head and Shoulders pattern to complete during those days.  Yet, here we are.

    As has been the case since late August, the only thing preventing a severe downturn (aside from the hope that the Fed will suddenly change course and be less hawkish) is VIX – which keeps getting smacked down every time it reaches 27-28.

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  • Inflation Rises

    August CPI came in hot, rising 0.1% in August instead of the consensus 0.1% decline. Core was even worse: 0.6% versus 0.3% consensus. The annual print also disappointed, coming in at 8.3% versus expectations of 8.0% or less.Having slightly overshot our 4153 target overnight, ES is now reversing sharply.continued for  members… (more…)

  • Charts I’m Watching: Sep 12, 2022

    Futures are up modestly on light volume algo action in advance of tomorrow’s CPI data.

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  • The ECB Chooses Stagflation

    Futures are off moderately in the wake of the ECB’s decision to impose a 75 bps rate hike – its highest ever – on an economy already reeling from spiraling inflation and weakening economic activity.

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  • CPI Edges Lower

    Futures ripped higher on the news that July CPI came in 0.2% lower than expected on both the monthly and annual headline figures: 0.0% and 8.5%.  Core rose 0.3% and 5.9% – still well above the Fed’s so-called 2% target.

    Much has been made of the price drop seen in oil and gas since mid-June. But, it’s important to note that we’ve seen this happen several times before. The July YoY increase of 44.1% has been about the average low ever since Apr 2021, with several highs in the 60% range.

    Prices would need to continue to decline in order for the YoY change in August to come in below 40%. And, our charts aren’t that all that convincing that oil/gas prices will continue to decline.  Maybe if we had another COVID lockdown or a nice little recession…

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  • FOMC Day: Jul 27, 2022

    Futures have ramped almost 1% overnight – a common occurrence lately, especially in advance of a Fed decision.

    Even the durable goods orders beat (a miss if you’re looking for the Fed to slow their rate hikes) did nothing to thwart the algo-driven meltup.

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  • Fast and Furious

    Between an FOMC meeting, consumer confidence, GDP, durable goods, PCE, consumer sentiment, new home sales and a slew of important earnings calls, this week promises to be one of the most important so far in 2022.

    Somewhere in all that data we should learn whether the economy is really in a recession (spoiler alert: it is.) The market’s response could be both fast and furious.

    Futures are up modestly but fading as we approach the open.continued for members… (more…)

  • New Highs for CPI

    CPI reached a new cycle high in June: 9.1% versus expectations of 8.8%. This is the highest print since November 1981. Core came in at 5.9%. Monthly prints were 1.3% headline and 0.7% core.

    The recent decline in oil and gas prices – although substantial – came too late to help mitigate June inflation. The Jun YoY price increase in gas remained strong at 60.73% – among the highest readings recorded in recent years.Futures are dumping on the news, as it clearly takes smaller Fed rate hikes off the table. VIX is even forgoing its usual pre-market dump and breaking out instead.Our analog remains on track.

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