The Equity Equation Knows All...

Money was leaving for a week ahead of Powell's testimony and the CPI report. Now, everyone is selling when the news hits.

Action to Take: With momentum still red and the market shaking out the news around inflation, it’s best to see how this market readjusts its expectations. This is going to be a very noisy day for the markets. You already have people screaming that “Trumpflation” is here, even though he was President for a little more than a week in January, and it was Biden’s final month. But… combine the media with fundamental ignorance about where inflation comes from, and you have this. Remember, inflation is a monetary phenomenon. Maybe Democrats will go complete supply-side reform… maybe.

Market outlook:

• Futures DOWN: S&P -116bps, Nasdaq -125bps, Russell -177bps

• CPI jumps 0.5% in January, highest monthly gain since August; core rises 3.3% annually vs 3.1% expected

• 10-year yield spikes 10bps to 4.64% as hotter-than-expected inflation dampens rate cut hopes

• Traders now price in a 30% chance of no 2025 cuts after Powell signals patience on rates

• WTI crude slips 1.2% to $72.46 after API shows surprise 9M b…