November 10, 2021
Good morning,
Finally! The market’s fairly impressive winning streak was broken yesterday. Risk managers all around blew a collective sigh of relief – winning streaks are ulcerating to them as overbought sirens blare. The break yesterday was quite pedestrian and may be the start of a few days of pause – remember, this bull market’s pauses are the new corrections. Following another sprint to record highs this earnings season, some pause is justified.
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8am ET – Futures are off this morning and yields are rising (bond prices down) before a notable inflation report. If CPI prints as expected it will register this highest headline reading since 1990, when oil prices soared after the Iraqi invasion of Kuwait.
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8:30am ET – CPI prints up +.9% headline, +.6% core. That’s quite a beat and higher than expected. It should get some attention. The initial move on Futures was down -0.4%. I suspect that selloff fades as we get closer to the open but wouldn’t be surprised is equities spend another day a bit underwater … and pausing.
Be well,
Mike