A bit of a late one today - had to accompany my wife to a procedure for most of the day and just got back in front of my screens….
What a difference a day makes. CPI print ended up being the narrative changer the bulls wanted, with a cooler print driving up QQQs 2.3%. Treasuries spiked with yields falling 10-15bps across the curve. Market is back to pricing in 40bps worth of cuts in 2025, where things were before the jobs report Friday, but still slightly below where Fed moved things in late December. 10 Yr now dipped back below the April highs which seems like a good line in the sand to watch in the case we might see any more yield tantrum:
Notwithstanding any big moves by Trump early on, other than claims and U-mich, we don’t get really much in terms of big econ releases that will likely move fed expectations significantly until Fed meeting on 1/29 so we are in front of a couple weeks periods where the bull narrative for stocks can continue to re-gain a foothold (strong growth, cooling inflation, good earnings, AI supercycle intact). I think most investors are feeling better about the market after today, including me. Still, we don’t have higher highs yet and I’d like to see the QQQs pop above the 20d and the recent channel downtrend since mid Dec to further confirm strength:
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