Well the day started softly for equities but then rallied hard for a number of hours before investors (traders) starting thinking about the ‘what if’ of the CPI report coming out later this week. What if it is ‘hot’?
The last CPI report was 8.3% year over year and the forecast for the report Thursday is for 8.1%. The core rate is forecast at 6.5% which is above last months 6.3%. I don’t need to tell you what will happen if the number is hot–above forecast and/or above last month.
Markets are searching for a ‘sign’ anything that will give them hope–thus far there really hasn’t been any sign of softening so I am expecting more of the same.
Once again my accounts are off just a tiny amount–a few hundred dollars. I haven’t even pondered a purchase today. Not that aren’t plenty of ‘bargains’ to buy, but with a low cash level I am being fussy thinking I can squeeze 20-30 basis points of incremental yield out of a few buys in a week or two.
Tomorrow we have 3 Fed ‘yakkers’ spouting off as well as the release of minutes from the last FOMC meeting.