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      CPI smells like that 21 spirit

      "Although M/M CPI prints over the past 12mo had plenty of encouraging aspects, the last few have better resembled early ’21, when inflationary pressures really started to accelerate. As we show in our decomposition below, this is also do to some of the same underlying factors. After providing a tailwind for the Fed (and consumers) energy prices have been marching higher since June, and shelter prices have begun to accelerate. One of the points we might be guilty of belaboring is that higher rates may actually serve to keep those prices bid as they increase home transaction friction. Clearly, the intermediate path isn’t a sustained trajectory of lower M/M prints, and that could be an issue for the headline Y/Y prints (and equities)."

      CPI smells like that 21 spirit
      Source: Jefferies
      Bull bodies:  VIX and S&P 500 P/E

       Risk appetite is improving, volatility compressed across asset classes, positive for equities

      Bull bodies:  VIX and S&P 500 P/E
      Source: Macrobond
      Run it hot

      Cyclicals vs. Defensives are on their best run since 2016.

      Run it hot
      Source: Morgan Stanley