Stock Market Update Wednesday February 14, 2024 Today's inflation data slightly exceeded expectations. What's striking to me about the current focus of many is their fixation on individual data points, while overlooking the broader picture of persistent inflation. The discussions on CNBC incessantly analyze the contributions of various components, base effects, and the myriad forms of inflation, such as PCE, PPI, CPI, and services. There appears to be a disconnect in connecting the dots. Inflation has been consistently surpassing expectations for approximately a year and a half, yet there are limited prospects for effectively addressing it beyond placing unwavering trust in the Federal Reserve. The prevailing belief is that the bond market's interest rate reflects an implicit forecast of the Fed's future actions. Much of the discourse is misguided, and the manner in which markets respond to these unsubstantiated perspectives on inflation is astonishing. Considering the market's dependency on passive investments and the substantial speculation evident in 0DTE options and other forms of speculation, the noise generated by price action is significant. Ultimately, while the inflation data, given its construction, may show signs of easing, the 'inflation problem' is expected to endure for an extended period.
Away From Stocks: The DXY was about flat, fixed income was lower, silver lost 0.5% and a small gain for gold.
A topping pattern due this Friday and I foresee a period of sideways consolidation for the remainder of February. However if anything changes our algorithms will give us a sell alert.