CPI Day is here, the anticipation is palpable. Unless you care more about meme stocks, anything involving AI, crypto meme coins, longer term ramifications of geopolitics, tariffs, the 2024 election, sports, your family, etc. (hopefully not in that order)...this is the day you've been waiting for all week.
PPI came in hot, maybe those consumer and business inflation surveys mentioned yesterday were onto something. Headline PPI was up +0.5% MoM above the 0.3% est. with services up 0.6%. A lot of attention seems to have landed on the 3.9% increase in the cost of portfolio management. Markets going up, leads to portfolio management fees go up and that is in PPI. That gives a new sense of how/why "financial conditions" matter. Remember when the Fed said they were relying upon financial conditions tightening to do some of the work for them, has that happened? Even yesterday Powell said that he thinks about monetary policy through its "effect on financial conditions more broadly and on the economy". Judging by PPI, I guess the answer to whether financial conditions are tightening is found by asking your financial advisor, after all they are likely making more money because your assets are up.
In other Fed news, both NY Fed and STL Fed had reports out that express some concern in rising credit card delinquencies, something to add to your list of things to keep an eye on.
Powell kept the script on being data dependent as it relates to "higher for longer" and that he isn't ready to prejudge whether inflation will remain persistent going forward.
On the day ahead it's CPI, Retail Sales and moar Fedspeak.
I guess I'll get back to drawing pictures to animate and Tweet out in an effort to cause certain stocks to moon, I'll report back when complete.
XTOD: The market is beyond satire, you can’t make it up
XTOD: Here's what should be done to address inflation: cut government spending, lower overnight rates, and remove the excess liquidity that's still sitting in the RRP facility.
XTOD: I just imposed a series of tariffs on goods made in China: 25% on steel and aluminum, 50% on semiconductors, 100% on EVs, And 50% on solar panels. China is determined to dominate these industries. I'm determined to ensure America leads the world in them.
XTOD: And are lumber tariffs next? This is not the path to a healthier economy!
XTOD: Don't understand how "protecting/hiding" our companies from the global competitive reality helps America "lead." In contrast, it will make our companies weaker by limiting their fitness. It will also drive further inflation. Certainly the lobbyists in DC are happy w/ outcome.
XTOD: People talking abt election odds should be paying attention to the fact that the (actuarial) probability of at least one of the 2 main presidential candidate dying over the next year is ~12%**plus or minus adjustment for current health.
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