Pre-Market Plan [9/11]
Good Morning Folks,
Did you know that markets have been statistically positive on September 11th? Perhaps it is to honor those impacted back in 2001. Rightfully so. A moment of silence in that spirt for this important day here in the U.S.
Okay, so yesterday I sent out the following line to the Members: I wanted to see a thematically in-line figure inflation data. Even hotter is OK. I did NOT want to see an overly cool number below consensus. See the reasoning here as to why (link). Blurb below.
Here’s how CPI played out this morning.
I followed up with a quick message to the Members on Whatsapp after the initial sharp negative market reaction to the inflation data (which came in In-Line) which I thought was not overly bearish.
The market has given people a sense that 50 BPs is good and that it is needed to sustain an advance.
So when in-line figures came in, the probability of a 25BP hike increased, diminishing the odds of a jumbo rate cut.
The initial reaction appeared to convey disappointment.
But this inflation data proves that there is still pricing power in the U.S. THOUGH it does shift the environment towards Stagflation.
At the margin, even though Stagflation is far from ideal, it is MUCH better than deflation.
Today’s CPI report diminishes the odds that the U.S. is slipping into rapid deflation.
I would take Stagflation over Deflation any day (though Neither are ideal).
We’ll discuss more in our Daily Plan.
Have a great day folks!
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