Major US indices have now turned into negative territory:
- Dow Industrial Average verse -7 points or -0.02%
- S&P index -8.26 points are -0.16%
- NASDAQ index -70 points or -0.42%
Yields remain lower with the 10-year down -5.9 basis for the 4.494% (high for the week reached 4.638%). The 2-year is down -4.6 basis points at 4.883% (the high yield this week reached 5.002%)
Adam warned of a "sell the fact" in his post yesterday saying:
"This is certainly going to be a market mover and I worry about the stock market if inflation is high. There has been a dry spell for tier-1 data in US markets but I wonder if we don't see a 'sell the fact' trade. What has me worried is that the bond market has faded the entire CPI move, despite a lower reading. If CPI can't lead to a sustained move, why should a more-dated report?
Now that assumes we don't get a miss of more than 0.1 pp on the month-over-month core but if it's +0.2% or +0.3% then the kneejerk may be faded, especially with a full data calendar next week and indications the market is starting to look more at growth data than inflation.
