It's been three days since last week's consumer price index report sparked the market about a potential peak in inflation. Since then, Fed speakers were pointing out that the Fed's job isn't done. “It will probably be appropriate soon to move to a slower pace of increases,” Fed Vice Chair Brainard told Bloomberg. “But I think what’s really important to emphasize: We’ve done a lot, but we have additional work to do.”
Chair Jerome Powell said two weeks ago, that the Fed wants investors to remember that it's too soon to declare "mission accomplished" when it comes to inflation. The Fed isn't eager to see another asset bubble, and it's taken on the task of talking down the market after every rally. Every time the market starts to price a Fed pivot, we see a decline in yields. Investors want inflation to go down, so stocks can go up. But every time stocks go up, the Fed fears inflation won't go down.
We'll get multiple new reads on the state of inflation (plus 8%-8.3% expected)- and the consumer -- starting tomorrow morning, when Walmart and Home Depot report quarterly results. Wednesday brings results from Target and Lowe's.
US markets and Europe fell Monday, after last week's furious Bear market rally. China rose today and for the week.
Trends of the Russell 2000, S&P 500 and Europe turned Bull Alert; trends of the 10year Treasury note, China, Nasdaq Comp. and Nasdaq 100 continue Bearish.
For last five days, Gold Miners + 11.8%, Tech +7.31, Communication Services +7.05%; laggards: Health Care +0.79%, Consumer Staples +0.62%, Energy 0.12%
Bonds The 10-year US Treasury Yield closed today at 3.865% well off its recent peak of 4.333%. The rate rise shows a loss of upward momentum. The 2-year US Treasury Yield fell today to 4.40%, down from a recent peak of 4.71%. The 2-year yields rise is slowing. The 10-2-year Yield Curve remains inverted, with its spread at -0.52 and moving in a sideways channel.
Currencies Currencies vs. US Dollar: The Australian Dollar, the British Pound, the Euro and the Yen all strengthened smartly but continue Bearish trends vs. US Dollar.
The bullish US Dollar fell to 106.53, down from the Sept. peak of 114.75; its uptrend is weakening. Gold's trend turned Bull alert as did Base Metals and Copper. West Texas Light Crude is in a sideways trend and appears weakening.
Weekly Market Breadth indicators improved having moved off the bottoms of their respective ranges with Nasdaq 100 and S&P 500 showing the most.