iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,906 Blog Posts

CPI DATA LOOMS

Let’s assess the situation.

The bubble has popped. All of the 30x sales stocks are back down below 10x, some a lot cheaper. This is a traditional valuation level for growth, pre 2016.

The economy is slowing but the Fed can’t help due to high inflation, measured by the CPI.

Therefore, if tomorrow’s CPI numbers comes in even a little bit better than expected, markets are going to absolutely  rip to the upside. We should soon enter a period of stability, where inflation is waning as the economy slows. To avoid earnings disasters like UPST, one could not buy stocks ahead of their results. Markets might improve during a slower inflationary period based on the notion the Fed can get less hawkish. HOWEVER, by the time summer swings around, the entire focus of the market will be on employment and economic growth. The major major concern isn’t inflation — because plunging share prices and growth rates solves that. The bigger issue down the road is economic prosperity in an environment that is deleterious to anything on par with scaleable globalized growth.

War looms and relations with east worsens daily. Ergo, take profits fast and don’t believe in bottoms.

 

I made 0.35% for the session, closed with 60% cash the rest long.

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11 comments

  1. soupbone

    Infaltion should moderate if the supply chains improve, in particular China with the crazy lockdowns over covid. The service sectors have inflation now too, which ratchets up and doesn’t come down. So a nice suprise for markets is likely, bonds too. Looking out further inflation will likely persist disappointingly.

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    • donnie wads

      Zero COVID will fail…China should focus on better vaccines instead of lockdowns.

      The other thing they should consider is that even in totalitarian regimes the power is given by the people. Eventually, the people will get fed up.

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    • tha pirate

      Have you all considered the possibility that the China lock downs have NOTHING to do with COVID & that this Wu-Flu is just being used as an excuse to control the supply chain and people they don’t want?

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  2. roguewave

    If CPI numbers are deemed a national security issue, and what isn’t a national security issue; they can be modified at will. It’s the law.

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    • discoordinated
      discoordinated

      I guess we are all political macro traders now. I used to get upset about that, but really what should I expect from the Molech crowd.

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  3. tha pirate

    Hard to understand why the price of gas is so high…

    JUST because Brandon killed the Keystone XL on literally his first hours in office, handed out trillions in “COVID relief” (wonder where all that $$ went) and is now intent on sending hundreds of BILLIONS more to Ukraine to provoke WWIII.

    Just can’t figure it out..

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