Still Not Transitory

At some point – perhaps after six months of hot inflation data – the Fed will be forced to admit that inflation pressure are not transitory. This morning we saw evidence that March personal incomes spiked by 21.1%, the most since 1946. Personal spending for the month shot up 4.2%, the most since last June. … continue reading →

Not Transitory, Not Even Close

If gasoline prices remain where they are or continue to rise, Powell will be just plain wrong about inflation being transitory. This is what to expect if gas prices were to flatline at this level through December. Unless most of the other components of inflation were to nosedive, CPI will remain well above 2% for … continue reading →

The Fed’s Clever Misdirection

If you were playing a drinking game this morning keying off the word “transitory” you’d have passed out by now. Seemingly everyone is talking about inflation these days. They all want to know whether inflation will be transitory (as Jerome Powell repeatedly insists) or persistent. When it comes to markets, this is the wrong question. … continue reading →

What Inflation?

The Case-Shiller Home Price index rose 12% YoY – the fastest pace since February 2006 – meaning even fewer Americans have a shot at purchasing or renting a house. Ironically, the burden falls mostly on the low-income families that the Fed claims to be most concerned about. Thank goodness we don’t have an inflation problem. … continue reading →

Update on Oil & Gas: Apr 26, 2021

March durable goods orders disappointed this morning, coming in at 0.5% versus the 2.3% rebound expected after February’s -1.2% flop. We couldn’t help wonder whether the data were somehow related to the first (tiny) breakdown in RBOB prices since the Mar 23 lows. Given that oil and gas are poised to deliver a huge increase … continue reading →

Charts I’m Watching: Apr 12, 2021

Futures are off slightly on a low volume Monday following what should have been a bigger reaction to the latest PPI data that was off the charts. Either bond traders all took Friday off, or it would appear that the Fed has taken “supporting” the markets to new heights. Markets will have another chance to … continue reading →

Calm Before the Storm?

There are many parallels between yesterday and Jan 26, 2018 – the calm before a vicious 10-day 11.8% storm.  The obvious one is that SPX is back to the top of the large yellow channel dating back to the 2009 lows.  Then, as now, this occurred shortly after SPX had bulled its way through a … continue reading →