It was one of those economic stats that could do no wrong. We already knew inflation was hot, but in the offchance it came in light — we’d moon.
But the data didn’t come in light and we reverse mooned into the grave. However, upon opening of the markets, we are once again rallying.
CPI 0.3% MoM; Exp. 0.2%
CPI 8.3% YoY, Exp. 8.1%
CPI Core 0.6%, Exp. 0.4%
CPI Core 6.2% Y/Y, Exp. 6.0%
— The_Real_Fly (@The_Real_Fly) May 11, 2022
No one should care about the CPI data because it’s backward looking. At this point only three things matter.
1. The war
2. Economic growth or lack thereof
The absence of sharply higher oil prices was beginning to wane on people in recent days. The idea oil could trade lower without Russian oil on the markets would equal some sort of economic apocalypse around the bend. Now with WTI +5%, we all feeeel better.
We are extremely oversold and markets act weird during periods like this, since so many people are getting wiped out. It’s rare to see markets V shape recover from such carnage. I would expect a process to take place, but at some point all of the pent up fear and loathing to turn into a different kind of fear of missing out and loathing for not buying when everyone else was selling.
If you enjoy the content at iBankCoin, please follow us on Twitter