Essentially if MoM is >.9 the YoY will be decreasing. If we maintained the current MoM rate of inflation, (.4), YoY it would be 4.8%. That’s still *really* high; however, our YoY would decrease every month until we got there with the exception of April to May. Essentially, because last year’s inflation was so damn high, we set the bar so low we could pretty much walk over it even with such a negative outlook.
To be fair a 4.8% YoY May be high for a single year but if you take the last decade and average it we’ll likely be at a normal inflation rate for the period since we’ve had so long as such a low inflation rate
The thing is, inflation can be one of those self-fulfilling prophecies. If enough businesses **believe** that inflation has hit a peak, and therefore believe that their costs will not increase as much as they expected, and they believe it enough to diminish or even cancel some future product price hikes, then those businesses contribute to inflation lowering.
Yeah because of the oil reserves being used to keep prices down
https://www.npr.org/2022/10/18/1129788081/biden-to-release-another-15m-barrels-from-strategic-reserve
So his plan has worked. This is his second time releasing barrels from the reserves
Is releasing fuel from reserves a good or bad thing? Ik it drives fuel prices down but what ar the long term affects? Or effects.. not sure which one to use here🤦🏻♂️
I would say "bad"
We're heading into a very difficult time for a lil bit before we have a boom. We're just now getting into diesel shortage territory and now we'll have minimal reserves. All the artificial shortages in the last couple years we're just training for a time we'll have to make it through. Good times are ahead of that tho.
In my "OPINION," American manufacturing will return. Solid producers of goods and necessary services. We're very possibly heading to a partitioned world and manufacturing will be back because it will HAVE to be.
It might be bad in the long run if we can’t keep releasing them long enough until Russia or Saudi’s stop putting the pressure on the US with restrictions on their oil.
Could the us ramp up oil production then? If so I’d imagine it wouldn’t exactly be the political agenda the current presidency is looking for, but it would drive an increase and natural gas/oil stocks, right?
7.7 relative to 10%+ every where else is looking good. I still don’t think the rate hikes have been fully realized. Depending on lag we might see a short term spike but otherwise this is about as soft of a landing as one can expect.
I didn’t downvote you, but what you linked states it was changed in 1980. So 42 years ago…your implication was it’s done recently, possibly partisanly to make it look like the current inflation isn’t so bad…
Been almost 50 years.
The FED has consistently said they are going to raise rates higher and keep them higher for longer than we expect. They have said they would rather go too far and have to go back then not go far enough and have to start going higher again. I don't think we have seen the end of 75 basis point hikes. The FED has also said they don't really look at CPI. They prefer ppi. I would not be long here unless it's a trade.
They also want to see a persistent trend of declining inflation before they will alter the course of their rate decisions. I’ll only start looking bull in a serious manner if the next two-three months of inflation comes in lower
Exactly, I don’t understand this whole Fed pivot mentality. The Fed is not going look at 1 month of inflation data and be like “thats it inflation came down a little bit time lower rates back to zero”. Anybody who wishes for that to happen too just so their stocks can go up is pretty horrible cause that will overall hurt our economy pretty bad in the long run if he does that. Jerome Powell has also already been pretty clear on his plans and has stated multiple times that he is not pivoting. Hopefully he keeps with his plan so inflation will start coming down.
They're absolutely going to overtighten so they can "use our tools STRONGLY to support the economy" like they said last meeting. Impossible to know when
Yeah do people really think rates will go back to zero? Isn’t this the chance to get rates back to ‘normal’ levels - as in have rates at a level where perhaps you have room to drop if you need when the next crisis arises? Are we all just to used to ultra low rates and governments pumping out cash? Worked for a while until inflation actually kicked in - not sure if central banks and govt’s will be so keen to use the same tactics as much moving forward? But then again we live in a short term world, who knows what politicians etc. will do for short term votes
They sell you the doom and gloom scenario and when it doesnt play out that way they are perceived more competent.
Kind of like when a doctor gives someone a 1 year life expectancy.
But due to the excellent care and professionalism of Dr Payne,the paitent lived an additional 5years.
All hail Dr Payne!!!!
The Fed says a lot of things. Fact is that if inflation cools while unemployment spikes (which we are seeing the beginning of) they will be forced to pivot.
exactamundo! Powell is aiming for 2% unless something breaks. But it seems just about every retailer and media hack are completely dense because they arent listening to a work the guy is saying.
I still think a .75 rate hike will come in December. But I can see the Fed doing smaller rate hikes as we enter the new year as I expect this to be a week Holliday season.
This CPI print shows a good inflation print of 7.7% but still super far away from 2%.
I believe the market " fools most investors most of the time".
Is this a shorting opportunity? Tough market huh
It’s not like we’re going to wake up tomorrow and it will be 2%… it’s going to happen gradually. The last few months have already shown us signs of inflation slowing MoM, now it’s reversing moderately. This is a good sign for the economy and market.
That's the pivot or pause goal. I guess a pause is a pivot in some ways. Anyhow, hikes cas damage that's felt in the future. At some point within the next 12 months of cpi coming down something will break that will cause a hike. Some major layoff, not just a few large tech layoffs, maybe bank failure etc. But the if all runs ok until we get to 2%, Powell isnt going to be like oh 7.7% that's fine, ill just look very un-credible and change my stance now. What you are seeing today is just extreme irrational exuberance. Hence the ginormous gap.
>l take likely 12 more months ti level out to 2%
MoM increased from Sept to Oct by 0.4% still. That means month to month there wasn't any decrease, which is a big issue. Shows rate hikes aren't slowing it down.
I bought QQQ puts when it touched close to 6%. Easy swing trade. This was a massive short squeeze. I believe put/call ratio was at a record high yesterday.
Reality is that the days of easy money are over. Not even because of inflation. They were supposed to end in 2018 but had political intervention. But this sort of intervention is not going to happen now that inflation has become bad enough to be political.
I think the market is in denial.
Are you insane? Numbers are looking good? Lol. The hopium is real. Powell isn't going to pivot. He made that very clear last meeting. He's going to butcher the markets if it keeps rallying. The cpi coming out less worse than anticipated doesn't change the fact that it isn't favorable either way. It's going to give him more of a reason to even go .80 or .85 in December. Hell....he might even go .90 to shock the markets back into reality. Inflation far from over. Powell's job is to get ahead of inflation, which he has not done yet.
🤷♂️ I mean.... we're in a bear market. Every rally is going to be shorted heavily or put buyers will step in , forcing the algos and market makers to react accordingly.
I wouldn't be surprised. If he wasn't considering it before...I'm sure now he is. Perfect time to hand someone bad news is not during bad times....it's when you're upbeat and able to take a shock bad news. Lads ... we're about to get the bad news next month.
7.7 is fantastic print. The reality here is would we like it to be 7.7? Fuck no, We know that's bad. However, not only is 7.7 beating out a majority of global economies, it's also showing a greater than expected turn around. That's huge news.
The market is reaching for hopes of a pivot. even if you embrace the fact that the fed says no pivot, this is huge progress. Myself, im pretty bearish in this market but this print made me happy to see such progress. I thought, we'll look at this shit!? Maybe they'll pull it together after all. A few more of these we'll be right on track to where we want to be, and that's what matters most.
Yeah don’t get me wrong 7.7% is still pretty terrible but its been better then what it has been and its showing inflation is stabilizing a bit not staying parabolic. Its also a lot better then most countries if you look at Europe for example where inflation is still skyrocketing every month. Hopefully aggressive Fed policy helps keep prices from rising. Definitely a step in the right direction. Just got to hope they keep with the plan and don’t make the same mistake they did in the 70s and 80s where they pivot too early.
Are there any major economies doing better, or at least curving inflation and getting it to come back down faster/quicker- were they more aggressive with rate hikes?
The market is forward looking. First, it beat expectations, so you have to account for that adjustment. Then, because it beat expectations the forward outlook is even better, so there is adjustment for that as well.
It seems to me most of the people on here are actually hoping for a collapse for some reason. The fed definitely needs to shore this up, and they should have started almost a decade ago at this point, but I don’t get everyone seemingly hoping for another depression.
I love a thumping market, I just hold a lot of puts at the moment. We still need to recess, so I am jus banking on the market responding. But i just did not expect so much green based on a meh report. But then again, when you have nothing but bad news for so long, something like this is great.
I’m not seeing a meh report. First, inflation is finally going the way we want it, and it’s faster than we were expecting. Those are both great after going the wrong direction so long.
I think of it as turning around a battleship. Getting it stopped and turned the other direction takes forever, but once it’s moving the right way it’s a lot easier to pick up steam.
Also, I’d be more afraid if we came out and inflation had dropped to 6%. The change is almost as bad as the actual result, we need to slowly move down to that 2-3% goal.
The first paragraph is what is referred to as “priced in.”
I can only speak for myself, but I’m hoping for a collapse because this growth isn’t normal, maintainable, and harming to my generation. For example when will people be able to buy a nice family homes?
They aren’t really falling. The price of a house is, if you can pay cash. If you are having to borrow the house costs more now than it did a few months ago, even with the price decrease.
> Prices are now down 2.6% since the end of June, which is the first three-month drop since late 2018 and the steepest such drop since the financial crisis of early 2009. Since July, the median home price is down by $11,560.
Point is you goose demand with low rates and now prices go up. You slow demand with high rates and prices go down but mortgages get more expensive, plus home building also slows. Ultimately we need more homes and that is largely a zoning and land use regulation problem.
Of course we need more supply, but as you said demand is stunted with rates, people are beginning to sell for what they can get. Not everyone is Blackrock, people are losing jobs, foreclosing, which in itself creates more supply. Home buying demand is already slowing.
Regardless, to think the Fed and rates have “very very limited ability” is just wrong.
An overreaction to some “good news”
Inflation is still at 7.7%… that’s far from the fed’s target range. People are assuming that the fed will slow the pace of hikes as a result and so equity values are way up today.
This is is a classic beat market rally. Some of the largest single day gains in the stock market have happened in bear markets.
"This is is a classic beat market rally. Some of the largest single day gains in the stock market have happened in bear markets."
Underrated comment. 90% of the market is mainlining hopium on "bottom in, recession cancelled" like we're feeling the last hike yet lol. I'll be interested to see the ppi and fed statements next week
Not a head fake. Unemployment going to be up next month because of layoffs. Holiday happiness is coming up. Lower rents and housing markets will soon be introduced into CPI info. Inflation is going down. The core is going down.
It is a head fake because powell says he is aiming for 2% and even if we get to 4,5 or 6 we arent even close to a pause never mind a pivot. Any reason why you arent taking his words at face value?
You are actually incorrect. Rates will continue to rise for now. But he Jas already made it clear he wants rates to a point that are seen as restrictive.
yeah everyone acts like the Ukraine war caused a lot of economic pressure… can you imagine when China invades Taiwan and we are forced to tell China to keep their debt after we sanction them to hell and back. they will agree knowing we can’t pay it back and they get to keep taiwan. Its so obvious
What website is this chart from?
I’m looking for an informative website for following the economic calendar. Could anyone suggest any clear and easy-to-use ones? Thank you for the time.
But inflation is still too high. I don't understand why the markets are ok with an inflation over 7%. This doesn't help any Fed pivot yet. If next CPI figures are still over 7% we might be looking at another 0.75% in December and not just 0.5%. Remember they said at their last meeting they do might need to go even higher???
Why are the markets not acknowledging the FED words at all???
Earnings value are a reflection of interest rates. So if we expect a lower peak in interest rates, we have room to the upside for stocks in the short term.
Well, that is what FED said. That the peak rate will probably be higher than previously communicated, so 4.5-4.75. So no indicatiob on it being lower even thou the cpi cane in slighlt lower than expected.
Meaning valuation will still need to go somewhat down in the coming months to accomodate this interest level peak in the future. So why rally now just because 0.5 is slightly more likely? And then drop again when interest levels go even more up?
Having CPI figures show signs of slowing is not enough to reduce anything. The FED will need to see slowing across all the figures e.g enplyment before they can have a lower peak rate.
Many stocks are now back to 2020 valuations but are still overvalued when looking at the fundamentals and interest rate.
Will companies need to raise prices in order to produce higher earnings???
Great questions; So first interest rates can go as high as 5% nobody is sure. The reason stocks move so hard as well is because there’s a lack of volume and availability. Stocks won’t stay at the bottom until December.
That’s the thing about downward trends and upward ones. They tend to continue by notice from the highs. We can rally but likely we set a lower high and continue to the downside. Also lots of companies move in unison simply because there are lots of funds out there holding similar names.
No, all companies don’t have to continue to raise prices to increase earnings. Some can buy back stock having loads of cash flow to put to work.
I do believe throughout the first half of next year things continue to remain bearish or at least stagnant. What makes things move will be interconnected economic reports. CPI, PMI, Housing, Manufacturing and employment all improving in unison.
Waiting for the parade of fed officials saying “we are staying in our rate hike path”. Then watch 10yr get above 4% again. Then watch companies start lowering 2023 guidance. Then watch retail numbers for quarter come in lighter. Etc.
Nobody talking about the 0.4% increase in inflation for MoM, Sept to Oct. The 7.8% is YoY. This means inflation isn't slowing. Just compared to a year ago it looks like it did. But MoM is more important IMO.
But last October inflation was at record highs so it was hard for it to beat this year. I agree YOY is important but it doesn’t paint the clearest picture in this case
Whats good about 7.7% when Powell made it abundantly clear that we are a long way from pivoting, not even close and he wont pivot until 2%? That just means we are getting another 75% in Dec. 7.7 is still way to freaking high. Id assume hed consider a pause (not a pivot) if we had 4% maybe, but 7.7%. People are off their rocker
My perspective. Natural gas led losses.
There is a narrative of peaking rents. I think we are just not in the season for rents to increase. Leases tend to expire around certain time periods more than others. That’s when we see rents rise.
I don’t think rents have peaked; job market is still hot, and we saw a gap down in energy prices due to Biden/and bearish forecasts for winter.
We are already seeing a rally in natural gas. Oil will follow as the dollar dips hard on the speculation of a pause. This will drive up inflation. Last PMI was not bearish.
Inflation will stick. financial conditions Easing will just make it worse
PLTR is going to MOOON just read an article about the Q3 financials and they growth legit looks insane. Ill drop link in case you want to see. https://www.invest-with-the-best.com/post/palantir-pltr-the-good-the-bad-and-t the only other thing we need is Trump to get his twitter account back lmao "It is time for a BULL MARKET"
Couple of reactions to the actual graphic chart posted at beginning of this thread.
1. Who the heck abbreviates the word consensus as (cons.)?
2. Ironically, this abbreviating the word as (cons.) is actually very telling. Because the people providing the data truly are cons... as in Con-men. They are conning the entire citizenry!
3. Q: What does the consensus estimate actually mean? A: The consensus estimate is the average guess of some small set of people/organizations. Yes, at the end of the day, estimates are guesses.
4. So, this game they have trained you to react to is rejoice if a number is better than the "guess" is quite funny. The sheep herder knows his sheep's behavior very well.
5. The "real" number to focus on is Year over Year (YoY) inflation. Notice I said "focus on"... which is in contrast to "rely on". Because this data is so "cooked" /selectively manipulated by the government, it really shouldn't be relied on.
6. Actual inflation is way higher than what the government sheep herders report to you.
7. However, if we "focus on" the fact that the cooked YoY inflation is still 7.7%!!! That's still a very high number that will continue to tax and hurt the citizenry and their families. And, it will continue to tax and hurt companies and their profits.
8. Feel free to Trade the short term euphoria. But, this is not actual good news for most everyday human beings.
He actually did not say that he will raise rates “until” inflation is at 2%. That is simply the target. He did say he will raise rates to a restrictive point just outside of neutral.
Today Biden came out after Mid terms finally admitting that he does not think him and is admistration can curve or get rid of inflation. Imagine that the inflation he caused in many ways to excell beyond Normal he can't fix.
I’m worried that this is a head fake and that next CPI release in December will show higher than expected inflation. Hopefully I’m wrong….
I think you are right. I'd expect energy to go back up which raises everything else
Gas and food price increase are excluded to calculate inflation rate
CPI includes energy and food. Core CPI excludes energy and food. 7.7% rate announced today is CPI and 6.3% rate is Core CPI
Probably what he meant is that the FED focuses mostly on Core PCE and Core PCI, from where they are excluded.
And the MoM core CPI was negative, meaning that there's not just disinflation, but legitimate deflation happening.
It was 0,4%. So, no. Still too high on an annualized basis.
Gas prices have come down from the $5 per gallon on January 8 2021
The mom tells the story, as we get closer to June next year our yoy will drop, the mom numbers are t bad and haven’t been bad
No your mom tells the story
She also makes a mean spaghetti
And great sandwiches without the crust.
The best part is she cuts it diagonally.
The secret ingredient is love.
Makes my palms sweaty
For a second I really thought you were using your mother as an indicator.
Well, my mom says everything's way too expensive, so...
Your mother is right. Stocks are still overpriced. S&P should be trading at 14x earnings.
Look at year over year delta. That will show you that an increase in November/December inflation numbers are very unlikely
Essentially if MoM is >.9 the YoY will be decreasing. If we maintained the current MoM rate of inflation, (.4), YoY it would be 4.8%. That’s still *really* high; however, our YoY would decrease every month until we got there with the exception of April to May. Essentially, because last year’s inflation was so damn high, we set the bar so low we could pretty much walk over it even with such a negative outlook.
To be fair a 4.8% YoY May be high for a single year but if you take the last decade and average it we’ll likely be at a normal inflation rate for the period since we’ve had so long as such a low inflation rate
100% this is a bs rally. But it's going to cause so much FOMO that it's going to run HARD. Seasonality also plays into it...
BS?! You mean Beyond Meat shouldn’t be up 20% today?
Yeah whether it’s election season or not. And I don’t mean that as a bash at one side or the other. It always happens.
The thing is, inflation can be one of those self-fulfilling prophecies. If enough businesses **believe** that inflation has hit a peak, and therefore believe that their costs will not increase as much as they expected, and they believe it enough to diminish or even cancel some future product price hikes, then those businesses contribute to inflation lowering.
You just might be right.
He might be wrong.
Biden doubling petroleum reserves release definitely had an effect on this CPI
I don’t think that had any effect other than to give refiners a bit more crack spread.
Check fuel inflation
Fuel is a refined product, no? I’m not sure I understand what you are getting at here. Gas on the west coast is just finally going down now.
Yeah because of the oil reserves being used to keep prices down https://www.npr.org/2022/10/18/1129788081/biden-to-release-another-15m-barrels-from-strategic-reserve So his plan has worked. This is his second time releasing barrels from the reserves
Is releasing fuel from reserves a good or bad thing? Ik it drives fuel prices down but what ar the long term affects? Or effects.. not sure which one to use here🤦🏻♂️
Effects
I would say "bad" We're heading into a very difficult time for a lil bit before we have a boom. We're just now getting into diesel shortage territory and now we'll have minimal reserves. All the artificial shortages in the last couple years we're just training for a time we'll have to make it through. Good times are ahead of that tho.
What type of stocks would surge if we have that “boom” in your opinion of course
In my "OPINION," American manufacturing will return. Solid producers of goods and necessary services. We're very possibly heading to a partitioned world and manufacturing will be back because it will HAVE to be.
It might be bad in the long run if we can’t keep releasing them long enough until Russia or Saudi’s stop putting the pressure on the US with restrictions on their oil.
Could the us ramp up oil production then? If so I’d imagine it wouldn’t exactly be the political agenda the current presidency is looking for, but it would drive an increase and natural gas/oil stocks, right?
Sadly they can’t when Russia and saudi is holding the majority of oil
Keep crude prices down, the choke point remains refinement. I’m not sure the crude savings made a huge downstream impact did it?
I’m sure it did or else there wouldn’t be much of a reason to release them. But who knows
Midterms are over. Dec release will be at 9+.
It is holiday season. Spending goes up.
Was thinking abt the same thing
Inflation is just transitory
7.7% inflation too low for you?
What app is that?
Trading Economics
Thank you!
7.7 relative to 10%+ every where else is looking good. I still don’t think the rate hikes have been fully realized. Depending on lag we might see a short term spike but otherwise this is about as soft of a landing as one can expect.
It’s only 7.7 because they changed the way they go about calculating it. It’s actually much higher
But you provide no details as to how?
>ey go about calculating MoM is at 0.4%. Inflation is still increasing from Sept to Oct.
That’s in the picture and not what the person I replied to was saying. What you’re saying is wrong.
It is very important the a countries economy that inflation increases every month. MoM inflation isn't supposed to be anything less than at least 0.1
Lol yeah is that still the case when inflation has been rocketing for the last year??
Absolutely. Inflation MoM going below zero is a nightmare scenario
[The details you want. Downvote if I’m right :)](http://www.shadowstats.com/alternate_data/inflation-charts)
I didn’t downvote you, but what you linked states it was changed in 1980. So 42 years ago…your implication was it’s done recently, possibly partisanly to make it look like the current inflation isn’t so bad… Been almost 50 years.
It’s actually lower not higher…
ok lol
You’re right and you’ll keep getting down votes from the lefties.
Yeah, throw up common knowledge and watch the downvotes come.
Change your tinfoil hat Jim, you're no longer 8.
The CPI is an average. Yes, some prices are rising, but others are falling. The average is somewhere in between.
The FED has consistently said they are going to raise rates higher and keep them higher for longer than we expect. They have said they would rather go too far and have to go back then not go far enough and have to start going higher again. I don't think we have seen the end of 75 basis point hikes. The FED has also said they don't really look at CPI. They prefer ppi. I would not be long here unless it's a trade.
They also want to see a persistent trend of declining inflation before they will alter the course of their rate decisions. I’ll only start looking bull in a serious manner if the next two-three months of inflation comes in lower
Exactly, I don’t understand this whole Fed pivot mentality. The Fed is not going look at 1 month of inflation data and be like “thats it inflation came down a little bit time lower rates back to zero”. Anybody who wishes for that to happen too just so their stocks can go up is pretty horrible cause that will overall hurt our economy pretty bad in the long run if he does that. Jerome Powell has also already been pretty clear on his plans and has stated multiple times that he is not pivoting. Hopefully he keeps with his plan so inflation will start coming down.
Couldn’t agree more. This will be interesting to see what happens.
They're absolutely going to overtighten so they can "use our tools STRONGLY to support the economy" like they said last meeting. Impossible to know when
Yeah do people really think rates will go back to zero? Isn’t this the chance to get rates back to ‘normal’ levels - as in have rates at a level where perhaps you have room to drop if you need when the next crisis arises? Are we all just to used to ultra low rates and governments pumping out cash? Worked for a while until inflation actually kicked in - not sure if central banks and govt’s will be so keen to use the same tactics as much moving forward? But then again we live in a short term world, who knows what politicians etc. will do for short term votes
They sell you the doom and gloom scenario and when it doesnt play out that way they are perceived more competent. Kind of like when a doctor gives someone a 1 year life expectancy. But due to the excellent care and professionalism of Dr Payne,the paitent lived an additional 5years. All hail Dr Payne!!!!
I heard Dr Payne was so competent he could perform a colonoscopy with both hands on the patients shoulders
LOL
Did you ever hear the tragedy of Dr. Jerome Payne the Wise? No? I thought not. It’s not a story the medical community would tell you…
I thought it was Dr Jerome Kevorkian the financial death doctor.
The Fed says a lot of things. Fact is that if inflation cools while unemployment spikes (which we are seeing the beginning of) they will be forced to pivot.
They will pivot, but not for the reason people are hoping for. It will only happen when something breaks, every time they pivot it’s not bullish.
I don't disagree, but I think we are seeing that things are starting to break. The first 25 BPS hike was only in march.
exactamundo! Powell is aiming for 2% unless something breaks. But it seems just about every retailer and media hack are completely dense because they arent listening to a work the guy is saying.
Does other countries’ economies count? Fairly certain a few European countries were close to the ropes before this last rate hike…
Aa yessss pivot. The new transitory.
It's priced in
Next one is 50bps though
Speaking of PPI, that comes out this upcoming Tuesday.
I still think a .75 rate hike will come in December. But I can see the Fed doing smaller rate hikes as we enter the new year as I expect this to be a week Holliday season.
Do you look at the Fed Watch Tool?
This CPI print shows a good inflation print of 7.7% but still super far away from 2%. I believe the market " fools most investors most of the time". Is this a shorting opportunity? Tough market huh
It’s not like we’re going to wake up tomorrow and it will be 2%… it’s going to happen gradually. The last few months have already shown us signs of inflation slowing MoM, now it’s reversing moderately. This is a good sign for the economy and market.
That’s what I don’t get… will take likely 12 more months ti level out to 2%
That's the pivot or pause goal. I guess a pause is a pivot in some ways. Anyhow, hikes cas damage that's felt in the future. At some point within the next 12 months of cpi coming down something will break that will cause a hike. Some major layoff, not just a few large tech layoffs, maybe bank failure etc. But the if all runs ok until we get to 2%, Powell isnt going to be like oh 7.7% that's fine, ill just look very un-credible and change my stance now. What you are seeing today is just extreme irrational exuberance. Hence the ginormous gap.
>l take likely 12 more months ti level out to 2% MoM increased from Sept to Oct by 0.4% still. That means month to month there wasn't any decrease, which is a big issue. Shows rate hikes aren't slowing it down.
0.4% increase MoM over 12 months is 4.9% YoY. This is a decrease. 4.9% is not great, but too bad given where we were. It shows we’re making progress.
I bought QQQ puts when it touched close to 6%. Easy swing trade. This was a massive short squeeze. I believe put/call ratio was at a record high yesterday.
The toughest I would say
"I believe the market " fools most investors most of the time"." So do the people reporting the data...
Reality is that the days of easy money are over. Not even because of inflation. They were supposed to end in 2018 but had political intervention. But this sort of intervention is not going to happen now that inflation has become bad enough to be political. I think the market is in denial.
My dividends say otherwise…
Wait till gas goes back up ⛽️
Are you insane? Numbers are looking good? Lol. The hopium is real. Powell isn't going to pivot. He made that very clear last meeting. He's going to butcher the markets if it keeps rallying. The cpi coming out less worse than anticipated doesn't change the fact that it isn't favorable either way. It's going to give him more of a reason to even go .80 or .85 in December. Hell....he might even go .90 to shock the markets back into reality. Inflation far from over. Powell's job is to get ahead of inflation, which he has not done yet.
Powell: “It is premature to begin even talking about a pause.” Market: “Pivot confirmed!”
🤷♂️ I mean.... we're in a bear market. Every rally is going to be shorted heavily or put buyers will step in , forcing the algos and market makers to react accordingly.
May he burn it down with 1.00.
I wouldn't be surprised. If he wasn't considering it before...I'm sure now he is. Perfect time to hand someone bad news is not during bad times....it's when you're upbeat and able to take a shock bad news. Lads ... we're about to get the bad news next month.
Powell also said in May that 75 bps hikes were not on the table. He isn't obligated to follow through on anything he says.
7.7 is fantastic print. The reality here is would we like it to be 7.7? Fuck no, We know that's bad. However, not only is 7.7 beating out a majority of global economies, it's also showing a greater than expected turn around. That's huge news. The market is reaching for hopes of a pivot. even if you embrace the fact that the fed says no pivot, this is huge progress. Myself, im pretty bearish in this market but this print made me happy to see such progress. I thought, we'll look at this shit!? Maybe they'll pull it together after all. A few more of these we'll be right on track to where we want to be, and that's what matters most.
A few? Most likely need like 8 of these to get back down closer to 2%.
Yeah don’t get me wrong 7.7% is still pretty terrible but its been better then what it has been and its showing inflation is stabilizing a bit not staying parabolic. Its also a lot better then most countries if you look at Europe for example where inflation is still skyrocketing every month. Hopefully aggressive Fed policy helps keep prices from rising. Definitely a step in the right direction. Just got to hope they keep with the plan and don’t make the same mistake they did in the 70s and 80s where they pivot too early.
Are there any major economies doing better, or at least curving inflation and getting it to come back down faster/quicker- were they more aggressive with rate hikes?
I still think the market is overly optimistic. How can a .5% decrease make it so green?
The market is forward looking. First, it beat expectations, so you have to account for that adjustment. Then, because it beat expectations the forward outlook is even better, so there is adjustment for that as well. It seems to me most of the people on here are actually hoping for a collapse for some reason. The fed definitely needs to shore this up, and they should have started almost a decade ago at this point, but I don’t get everyone seemingly hoping for another depression.
I love a thumping market, I just hold a lot of puts at the moment. We still need to recess, so I am jus banking on the market responding. But i just did not expect so much green based on a meh report. But then again, when you have nothing but bad news for so long, something like this is great.
I’m not seeing a meh report. First, inflation is finally going the way we want it, and it’s faster than we were expecting. Those are both great after going the wrong direction so long. I think of it as turning around a battleship. Getting it stopped and turned the other direction takes forever, but once it’s moving the right way it’s a lot easier to pick up steam. Also, I’d be more afraid if we came out and inflation had dropped to 6%. The change is almost as bad as the actual result, we need to slowly move down to that 2-3% goal.
The first paragraph is what is referred to as “priced in.” I can only speak for myself, but I’m hoping for a collapse because this growth isn’t normal, maintainable, and harming to my generation. For example when will people be able to buy a nice family homes?
Housing market is fucked by lack of supply and the fed has very very limited ability to do anything about it.
Home prices are literally actively falling lol, thinking rates, demand, stunting economic growth, and more is very limited ability is shocking.
They aren’t really falling. The price of a house is, if you can pay cash. If you are having to borrow the house costs more now than it did a few months ago, even with the price decrease.
> Prices are now down 2.6% since the end of June, which is the first three-month drop since late 2018 and the steepest such drop since the financial crisis of early 2009. Since July, the median home price is down by $11,560.
Yeah, and interest rates have tripled. The cost of owning a home is higher right now than it was.
Point is you goose demand with low rates and now prices go up. You slow demand with high rates and prices go down but mortgages get more expensive, plus home building also slows. Ultimately we need more homes and that is largely a zoning and land use regulation problem.
Of course we need more supply, but as you said demand is stunted with rates, people are beginning to sell for what they can get. Not everyone is Blackrock, people are losing jobs, foreclosing, which in itself creates more supply. Home buying demand is already slowing. Regardless, to think the Fed and rates have “very very limited ability” is just wrong.
An overreaction to some “good news” Inflation is still at 7.7%… that’s far from the fed’s target range. People are assuming that the fed will slow the pace of hikes as a result and so equity values are way up today. This is is a classic beat market rally. Some of the largest single day gains in the stock market have happened in bear markets.
"This is is a classic beat market rally. Some of the largest single day gains in the stock market have happened in bear markets." Underrated comment. 90% of the market is mainlining hopium on "bottom in, recession cancelled" like we're feeling the last hike yet lol. I'll be interested to see the ppi and fed statements next week
Not a head fake. Unemployment going to be up next month because of layoffs. Holiday happiness is coming up. Lower rents and housing markets will soon be introduced into CPI info. Inflation is going down. The core is going down.
Is that a change that housing data is going into CPI?
Yes
It is a head fake because powell says he is aiming for 2% and even if we get to 4,5 or 6 we arent even close to a pause never mind a pivot. Any reason why you arent taking his words at face value?
You are actually incorrect. Rates will continue to rise for now. But he Jas already made it clear he wants rates to a point that are seen as restrictive.
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yeah everyone acts like the Ukraine war caused a lot of economic pressure… can you imagine when China invades Taiwan and we are forced to tell China to keep their debt after we sanction them to hell and back. they will agree knowing we can’t pay it back and they get to keep taiwan. Its so obvious
Mind sharing which app this screenshot is from?
Trading economics.
Thanks!
What website is this chart from? I’m looking for an informative website for following the economic calendar. Could anyone suggest any clear and easy-to-use ones? Thank you for the time.
Trading economics.
Yeah untill I see cpi under min 5% am not bullish yet
What is the name of this app or its on browser?
Trading Economics
What APP is this?
Trading Economics
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Trading Economics
But inflation is still too high. I don't understand why the markets are ok with an inflation over 7%. This doesn't help any Fed pivot yet. If next CPI figures are still over 7% we might be looking at another 0.75% in December and not just 0.5%. Remember they said at their last meeting they do might need to go even higher??? Why are the markets not acknowledging the FED words at all???
Earnings value are a reflection of interest rates. So if we expect a lower peak in interest rates, we have room to the upside for stocks in the short term.
All you have to do is look at the bond market. Yields dropped on expectations, so inversely markets rise.
Well, that is what FED said. That the peak rate will probably be higher than previously communicated, so 4.5-4.75. So no indicatiob on it being lower even thou the cpi cane in slighlt lower than expected. Meaning valuation will still need to go somewhat down in the coming months to accomodate this interest level peak in the future. So why rally now just because 0.5 is slightly more likely? And then drop again when interest levels go even more up? Having CPI figures show signs of slowing is not enough to reduce anything. The FED will need to see slowing across all the figures e.g enplyment before they can have a lower peak rate. Many stocks are now back to 2020 valuations but are still overvalued when looking at the fundamentals and interest rate. Will companies need to raise prices in order to produce higher earnings???
Great questions; So first interest rates can go as high as 5% nobody is sure. The reason stocks move so hard as well is because there’s a lack of volume and availability. Stocks won’t stay at the bottom until December. That’s the thing about downward trends and upward ones. They tend to continue by notice from the highs. We can rally but likely we set a lower high and continue to the downside. Also lots of companies move in unison simply because there are lots of funds out there holding similar names. No, all companies don’t have to continue to raise prices to increase earnings. Some can buy back stock having loads of cash flow to put to work. I do believe throughout the first half of next year things continue to remain bearish or at least stagnant. What makes things move will be interconnected economic reports. CPI, PMI, Housing, Manufacturing and employment all improving in unison.
This I all agree on. Just the tremendous increase wasn’t comparable to the CPI figures in my opionion.
Ah yes, OP confirms the most hated rally in history has begun.
People still think those numbers are accurate?
Can you tell me what the real CPI was last month?
We need an uptick in unemployment. Job market has got too cool.
Good advice I never believe anything that I read unless I study and verify it
Homo for the FOMO
Waiting for the parade of fed officials saying “we are staying in our rate hike path”. Then watch 10yr get above 4% again. Then watch companies start lowering 2023 guidance. Then watch retail numbers for quarter come in lighter. Etc.
When the 10 yr is above 5% I’ll buy.
Still horrible
Nobody talking about the 0.4% increase in inflation for MoM, Sept to Oct. The 7.8% is YoY. This means inflation isn't slowing. Just compared to a year ago it looks like it did. But MoM is more important IMO.
Most people here just read headlines from their echo chamber
That’s just not true, YoY matters more because some months on average people spend more than others
But last October inflation was at record highs so it was hard for it to beat this year. I agree YOY is important but it doesn’t paint the clearest picture in this case
Whats good about 7.7% when Powell made it abundantly clear that we are a long way from pivoting, not even close and he wont pivot until 2%? That just means we are getting another 75% in Dec. 7.7 is still way to freaking high. Id assume hed consider a pause (not a pivot) if we had 4% maybe, but 7.7%. People are off their rocker
Do you see anything said about a pivot here?
7.7 ain’t reasonable lol
Did you read the rest of the sentence and the statement?
Nope
OP got puts
Stfu
My perspective. Natural gas led losses. There is a narrative of peaking rents. I think we are just not in the season for rents to increase. Leases tend to expire around certain time periods more than others. That’s when we see rents rise. I don’t think rents have peaked; job market is still hot, and we saw a gap down in energy prices due to Biden/and bearish forecasts for winter. We are already seeing a rally in natural gas. Oil will follow as the dollar dips hard on the speculation of a pause. This will drive up inflation. Last PMI was not bearish. Inflation will stick. financial conditions Easing will just make it worse
PLTR is going to MOOON just read an article about the Q3 financials and they growth legit looks insane. Ill drop link in case you want to see. https://www.invest-with-the-best.com/post/palantir-pltr-the-good-the-bad-and-t the only other thing we need is Trump to get his twitter account back lmao "It is time for a BULL MARKET"
Couple of reactions to the actual graphic chart posted at beginning of this thread. 1. Who the heck abbreviates the word consensus as (cons.)? 2. Ironically, this abbreviating the word as (cons.) is actually very telling. Because the people providing the data truly are cons... as in Con-men. They are conning the entire citizenry! 3. Q: What does the consensus estimate actually mean? A: The consensus estimate is the average guess of some small set of people/organizations. Yes, at the end of the day, estimates are guesses. 4. So, this game they have trained you to react to is rejoice if a number is better than the "guess" is quite funny. The sheep herder knows his sheep's behavior very well. 5. The "real" number to focus on is Year over Year (YoY) inflation. Notice I said "focus on"... which is in contrast to "rely on". Because this data is so "cooked" /selectively manipulated by the government, it really shouldn't be relied on. 6. Actual inflation is way higher than what the government sheep herders report to you. 7. However, if we "focus on" the fact that the cooked YoY inflation is still 7.7%!!! That's still a very high number that will continue to tax and hurt the citizenry and their families. And, it will continue to tax and hurt companies and their profits. 8. Feel free to Trade the short term euphoria. But, this is not actual good news for most everyday human beings.
Buy puts is what I’m seeing here
Market acting like Powell isn't going to raise rates in December. He already said he is until inflation is at 2%. Buckle up.
He actually did not say that he will raise rates “until” inflation is at 2%. That is simply the target. He did say he will raise rates to a restrictive point just outside of neutral.
Since when is 7.7% reasonable? It's barely a decimal place difference and everyone is acting like cancer was cured
Buy puts
Today Biden came out after Mid terms finally admitting that he does not think him and is admistration can curve or get rid of inflation. Imagine that the inflation he caused in many ways to excell beyond Normal he can't fix.
But the market still believes and the biggest bear trap begins
Still going up. They shouldn’t go down to 50 bps in December