The 10Y’s Warning

10Y yields briefly poked above the Mar 2021 highs, adding to the drama surrounding next week’s CPI report. Meanwhile, December NFP came in at +199K, less than half consensus, while the unemployment rate dipped to 3.9% and wages continued to strengthen.  Remember, this was all pre-omicron. Futures were not amused. While ES held its 50-DMA … continue reading →

The De Facto Shutdown

Companies and individuals alike are cutting back their activities as the omicron outbreak continues to accelerate. Many companies, short of employees, supplies, or customers are raising pay, trimming back hours or cutting product offerings in order to stay afloat. Individuals are cutting back their activities in order to stay healthy. Though not official, the shutdown … continue reading →

Inflation Highest in Nearly 40 Years

At 6.81%, headline inflation is now the highest it has been since March 1982 (6.78%.)  Originally driven by sharply rising oil and gas prices… …it is now broad-based and anything but transitory, with medical commodities the only category below the Fed’s original 2% target. Algos responded with the usual VIX smackdown which, not surprisingly, began … continue reading →

A Death Cross from VIX

It’s only happened 4 times in the past five years. The last time it happened was on Feb 27, 2020.  SPX had reached a new all-time high of 3393.52 a week earlier and had sold off 12% so far on news of the new coronavirus reaching US shores.  We were in the minority of analysts … continue reading →

Update on Oil & Gas: Nov 29, 2021

Almost a year ago we noted that the rapidly rising price of oil and gas would contribute to alarming CPI prints [see: Don’t Ignore Inflation.] Punch line? Oil and gas will have to fall significantly by April or we’re looking at a 20%+ YoY increase in gas prices – which has historically produced 2.4-2.7% annual … continue reading →

DXY: Finally Breaking Out?

Stocks tumbled yesterday on inflation numbers that call into question the pace of the Fed’s taper and rate increases. Then they rallied overnight on an 11.4% collapse in VIX. The most significant chart on my screens at the moment, though, is the US dollar. DXY has had great difficulty breaking out of a tightly controlled … continue reading →