PPI vs. Fed

S&P 500 celebrated the tame CPI figure, and Fed minutes mentioning (risks of, thanks to banking) recession in 2H 2023, took care of the rest. Bonds risk-off, USD not well bid thanks to Fed pivot bets being dialed up, and real assets doing very well. The same goes for rising unemployment claims and slowing down PPI (inflation in the pipeline). The key question is when would the justifiably bearish interpretation overpower the remaining bullish sentiment (as if Fed pivot were happening in vacuum)...

More intraday commentary on Twitter and Telegram follows as always – best combined with individual chart sections below.

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Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

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Junk bonds have made up their mind yesterday, and will continue underperforming quality instruments (its upswing attempts would be sold into increasingly heavily over the weeks ahead). 4,129 is a key daily ES_F level for deciding the daily bias – muddling through with either slightly bullish or slightly bearish daily tendency. As much as 4,160s are are out of an easy reach (given the terrible market breadth), and so is 4,015 followed by 4,078 (the latter level would flip the sentiment fairly fairly, fairly fast, but we aren‘t there yet).

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