Not So Fast!

You could argue that the annual PCE print of 3.6%, the hottest since 1992, is merely a function of the base effect – last year’s crash in inflation.But that argument falls flat when you consider that MoM Core PCE, which is completely unaffected by the base effect, soared by a record 0.7%. Naturally, both stocks … continue reading →

What’s the Holdup?

The Dow, the most easily and commonly manipulated index, has gone nowhere since failing to hold its 3.618 Fib extension at 34,430. It begs the question: what’s the holdup? Usually, when a closely followed index goes sideways for a while, it’s because an important moving average is moving into position for a backtest. But, is … continue reading →

Why Bonds Are Still Important

I had an great question yesterday regarding the bond market: “Is it possible the fear of pandemic in spring 2020 affected the behavior of 2yr and 10 yr and then indirectly triggered the crash?” Pebblewriter longhaulers will recall that our bond cycle model forecast a severe plunge in interest rates long before anyone was talking … continue reading →

COVID: Still With Us

Interesting piece in Reuters today on Japan’s vaccination efforts and the overwhelming level of infections in Osaka, Japan’s second largest city, only two months ahead of the Olympics. While many countries are making good progress with vaccinations, Japan – the 11th most populous country in the world – is lagging badly.  It’s not the only … continue reading →

PPI Confirms Hot Inflation

It comes as no surprise that PPI confirmed yesterday’s hot CPI print, coming in at a whopping 6.2%. We’ve been beating the inflation drum for so long, it feels a bit anticlimactic to acknowledge that it’s finally here and even slightly greater than we anticipated. As regular readers well know, I expected central bankers to … continue reading →

Blowout Inflation is Here

April CPI came in at 4.2%, a rate not seen since August 2008. CPI has topped 4.2% only twelve months in the past 30 years, with the bulk of those instances during Jan-Sep 2008 when CPI pushed above 10Y yields. The Fed has managed (so far) to keep a lid on yields, providing additional evidence … continue reading →

Biggest Jobs Disappointment in Over 20 Years

Blockbuster jobs data? Not so much. At 266K versus over 1MM consensus, it was the worst miss since 1998. The futures initially held the overnight ramp, taking their cues from VIX, which barely budged on the hugely disappointing print. But, VIX also hasn’t (yet) broken down the way it normally would if a full-court press … continue reading →

Charts I’m Watching: May 6, 2021

Futures are flat after tumbling to and holding our backtest target yesterday morning. But, pay no attention to stocks just yet. They should continue to be under pressure, with the real action in oil and gas. continued for members… … continue reading →