Futures very green due slow cool inflation

johnN

Inflation slowed again last month, more than expected, as the Federal Reserve raised interest rates at the fastest pace in decades.

The Consumer Price Index (CPI) in November showed a 7.1% increase over last year and 0.1% increase over the month. Economists had expected prices rose at an annual 7.3% clip and 0.3% month-over-month, per Bloomberg data.

On a "core" basis, which strips out the volatile food and energy components of the report, prices rose 6.0% year-over-year and 0.2% over the month. Consensus estimates called for a 6.1% annual increase and 0.3% monthly increase in the core CPI reading.

https://www.google.com/amp/s/www.cnbc.com/amp/2022/12/13/cpi-inflation-november-2022-.html


Markets loving the CPI print

Green candles everywhere in the stock marke

Spy near 200 days ma maybe slow uptick from there
Fomo tomorrow possible 0.5% and easing /back off rates possible slow pivots

Sven

Lowered than expected CPI in November.

The U.S. Labor Department's report showed that prices increased by 7.1% on an annual basis in November, while the core rate, which excludes volatile food and energy prices, climbed 6.0%.
Economists were expecting a 7.3% rise in headline CPI and a 6.1% rise in core rates.

https://fidelity.com/news/article/top-news/202212130724RTRSNEWSCOMBINED_KBN2SX11A-OUSBS_1?print=true

rforno

Very green at the NY open has led to giving back nearly all of it by 1315 ET. This price action wouldn't surprise me if we close red on the day.

Crash

Yes, from +3%, SP500 is now +1%. Nice, but the damnable pre-ordered computerized algo trading bullshit...

BenWP

The futures this AM were a fine example of irrational exuberance.

Crash

BenWP said:

The futures this AM were a fine example of irrational exuberance.

indeed.

hank

Yep. Seemed like the market was on drugs … Crazy volatile …

Sven

The bond market went up nicely as investors gain confidence that a slower pace of rate hikes are in the plan:

LQD, +0.77%
BND, +0.68%
JNK, +0.89%

Sven

The bond market went up nicely as investors gain confidence that a slower pace of rate hikes are in the plan:

LQD, +0.77%
BND, +0.68%
JNK, +0.89%

johnN

Sp500 and IWM smallcaps etf keep getting rejections at 200 d MA... lots bears and big whales waiting to short + sales for profit at that level
Wait for few days maybe difficult clear the huddles... Could be stagnation for awhile or downtrends

yogibearbull

On a volatile day, ALL volatilities were DOWN: stock VIX, VXN, RVX; bond MOVE;
EM VXEEM; gold GVZ; oil OVX. In fact, several crashed by 10% or more.
This was also unusual.

hank

yogibearbull said:

On a volatile day, ALL volatilities were DOWN: stock VIX, VXN, RVX; bond MOVE;
EM VXEEM; gold GVZ; oil OVX. In fact, several crashed by 10% or more.
This was also unusual.

Agree. Strange day. Dollar must of gotten hit hard on the prospect of lower U.S. rates. Metals up sharply. DODLX (global bond) jumped 0 .77%.

I attempted to off-load a bit of my inverse fund SPDN. Couldn’t quite get the price I wanted. Close, but no cigar. Very small hold anyway. I track TAIL and it should have gained today with bonds rising and the volatile markets. But it fell .13% / Go figure.

I’m hearing on some assorted media that in aggregate there’s an unusually heavy “bet” against the S&P and equities in general. In other words, a whole lot of people have figured out (or believe) that shorting equities is a way to make money. If that’s the case, might help explain what’s happening.

Don’t know. Just watching the show.

Edit: 10 PM - Bloomberg is reporting that the dollar “closed at a 6 month low” on Tuesday. Of course, that’s w/o knowing what currencies they’re comparing it to. Nonetheless, the dollar did fall quite a bit.

davidrmoran

krug today

A quick note about "core" inflation. I'm aware of at least 6 measures:

Traditional
Median
Trimmed mean
Supercore (traditional ex shelter)
Superdupercore (super also ex used cars)
Furman core (use market rents for shelter)

(using Zillow in place of BLS shelter)

Or use market rents instead of BLS. But even "supercore" excluding shelter is running at 3.6% over past 3 months if you also exclude used cars. Still curb-our-enthusiasm time, although dire Volcker scenarios look ever less likely

Old_Joe

@davidrmoran- Yes, I really like Krugman's perspectives. He shows both sides (or all sides, when more than two) of an argument, and then explains why he prefers whatever his stated position may be. Very honest approach, I think. Probably worth quoting his final summary:

People do expect elevated inflation over the next year, probably because they’re extrapolating from elevated gas prices earlier this year. But medium-term inflation expectations are quite low. There’s just no sign of inflation getting entrenched.

So where are we on the inflation fight? Until recently it was clear that overall spending was rising too fast to be consistent with low inflation, and my superdupercore measure suggests that this may still be true. I certainly understand why the Fed isn’t ready to declare victory yet.

But given the absence of evidence that inflation is getting entrenched, victory may be a lot closer than many people imagine.

Crash

PK is ultra-smart. This ignorant fool disagrees.

davidrmoran

Go on.

I do really wish that he and Furman would devise some prudent realistic reality-tested baseline range or ranges (by area) which includes food prices! --- since where I live that is all anyone knows firsthand and talks about and complains about, rightly or wrongly. Jeez louise. It can just be breads, milk, eggs, protein other than fancy beef, pasta and pastes like pb and hummus, coffee and tea, veg frozen and fresh, cereals, some sugars / desserts, all of the usual stuff a frugal family buys every single week if not more often.

Old_Joe

What's a hummus? I though those were some new electric car.

Yeah, you're right about a decent COL gauge. It must be a lot harder than it would seem.

MikeM

@Old_Joe, I believe hummus is a tasteless light brownish (I will add no more descriptors) spread you put on crackers or dip bread into. Saw it at a party one time. It lasted on the buffet table a whole lot longer than the Buffalo style chicken wings And talk about inflation... try buying chicken wings. They cost as much as steak in my neck of the woods.

yogibearbull

Hummus is a popular Middle Eastern side dish that is made from chickpeas/garbanzo-beans. It is basically bland but can be spiced up. One can eat it with pita-bread, pita-chips, or other chips.
https://en.m.wikipedia.org/wiki/Hummus

Old_Joe

@yogibearbull- You're still making the mistake of taking me seriously. My (kinda part mideastern) wife usually has a container of hummus in the refrigerator. I'm with MikeM on this.

Wile she's eating her hummus on crackers I'm eating peanut butter on crackers. Go American, I say.

Sven

Thanks @davidmoran, always enjoy Paul Krugman views on inflation. After Wednesday’s rate hike, investors are now fear of recession more than inflation.