Data & Insights: Critical Pre-CPI Strategy and Inter-Market Data Commentary
The most important Inflation CPI report of the year is about to arrive for both Bulls and Bears
Note to Readers: With the Headline CPI coming out tomorrow on February 14th, I wanted to split up our mid-month strategy note into Part 1 and 2.
Given that this note is time sensitive, it is written with brevity in mind and will be followed up with another Part 2 strategy after inflation data has been made official.
A preview is included here for my public friends.
The January 2023 CPI report will set the tone for the weeks ahead. Get prepared with the latest data and insights in this newsletter.
Members,
Welcome back to another Bi-Weekly report.
With Inflation CPI coming out tomorrow, I’m going to split this note into Part 1 and Part 2 for my mid-month report.
Part 1 will discuss observations surrounding Investor Positioning and Inter-market Data ahead of January’s 2023 CPI report released on Feb 14th.
Part 2 will discuss the actual inflation report itself, the market’s reaction, and what the path may look like for market participants going forward. Part 2 will be released on the 15th or 16th (most likely the 16th given that I need time to digest information).
Because I’m splitting up the Bi-Weekly into 2 parts, I will focus on being very concise as the market’s dynamics will quickly change as the live data comes in tomorrow.
Here, we have one of Wall Street’s biggest sell-side banks -JPM- offering their pre-CPI strategy.
The above table is what Wall Street’s JPM is planning for in terms of scenario analysis for January’s CPI.
Given that expectations for CPI is to come in at 6.2%, JPM’s modeling suggests that markets have an upward bias if expectations come in +/- .1% of consensus figures.
The investment bank has assigned a low probability of a CPI coming in hotter than 6.5% or cooler than 6%, with a 90% confidence range that the figure will be between 6% and 6.4%.
In this note, I will share with you how the market’s composition has subtly changed ahead of this critical CPI report.
In January and early February, the market’s advance was nearly universal and broad-based.
That is no longer the case, and this Part 1 note will show you the divergence that has started to form within the sub-sectors of Semiconductors, Tech, and Consumers.