Republic Risk: CPI Joy and Copper Hits New Highs

Well, the markets are getting really optimistic about inflation again. Let's play that game for the 10th time over the last two years as we move toward overbought territory.

Equity Storm Watch Is GREEN on the S&P 500 and GREEN on the Russell 2000

This morning, markets are celebrating that inflation came in cooler for the month than expected. But let’s keep in mind that inflation is still up 3.4%, compounding off the back of extreme inflation just 18 months ago. Since the start of Bidenomics, inflation is up 19.5% overall. According to the government report, restaurants, electricity (hello Green transition), and transportation services increased greatly. The big problem in this report is that Core Inflation minus shelter increased by 5.05% in the year. We’re still well away from a rate cut, as slashing rates would only spur more economic activity and likely more inflation.

What to Do Today: The headline news is still positive, but when you dig into the CPI report, you’ll see a big divide between goods prices (which are falling) and services prices, which remain VERY sticky - above 5%. Be aware that the S&P 500 ETF (SPY) is approaching overbought territory on…