Tuesday 13 February 2024

Upset on CPI

US equity indexes closed very significantly lower, SPX -68pts (1.4%) at 4953. Nasdaq comp' -1.8%. Dow -1.3%. The Transports settled -2.6%. R2K -4.1%

SPX - daily

VIX - daily


US equities opened significant lower on the latest CPI data.

Headline y/y: 3.1% vs 3.4% prior
Core y/y: 3.9% vs 3.7% prior

The natural concern is that underlying inflation is distinctly sticky around 4%.
What happens if it ticks upward later this year toward 5%?
What about the 4-8 rate cuts that many were expecting?

Mr Market has (at least partly) ramped since Oct'2023 on hopes of rate cuts, and its clearly vulnerable if interest rates aren't broadly cut into 2025. 

The SPX saw initial downside to 4945, bounced to 4971, saw a secondary wave to 4920, and settling at 4953.

Volatility picked up, the VIX printing 17.94 - the highest since Nov'1st, and cooling back to settle at +13.8% to 15.85. 

Extra charts in AH (usually around 5pm EST) @ https://twitter.com/Trading_Sunset

Goodnight from London


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