Republic Risk: Told You To Hedge…

This might have been the Consumer Price Index reading that decided the 2024 election... and now we have to talk about interest rates going UP... not down.

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

Okay… so let’s eliminate any rate cut in June… and probably start talking about mortgage rates going up and not down. We’ve lost the plot…and the Consumer Price Index came in with a 0.4% monthly increase and a 3.5% annualized increase. That was above expectations. Meanwhile, core CPI also topped expectations - signaling a re-inflation worry across the entire economy. As I’ve said a few times - we need to go UP on rates to 6% and end this. But politics are a beast - aren’t they?

Maybe they can forgive all student loan debt and allocate trillions to “environmental justice…” Then, the Fed Funds rate can go to 10%.

This is just terrible fiscal management…  

We’ve hit 1970s Redux.

We need a “Morning in America” moment… now.

We continue to hedge, but we’re heading back under 20-day support levels, and we STILL have the Fed minutes today. We’re about to have our first negative event of the year - and it will be a very ill-timed crunch on reserves and money markets.

If we go negative, read this.

Remember to focus on positive sectors like energy or trade-around names that will see plenty of government spending - like GEO Group (GEO), which fell short of $16 on Monday (it was $13.50 at our coverage start).