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‘Bubbly Rallies’ And ‘Sharp Selloffs’: 3 Scenarios For Stocks As Inflation Pressures Build
Well in case you didn't notice, Thursday brought still more evidence that price pressures are building in the U.S.
Here's the Empire State Manufacturing prices-paid index, which jumped 12.4 points to its highest since 2012 in February:
"Input price increases picked up noticeably, with the prices paid index reaching its highest level in several years," the survey notes.
Additionally, the core PPI numbers were a beat (0.4% m/m against consensus of 0.2% and 2.2% y/y against consensus +
This isn’t that weird:
Value guys have been sidelined for years – they’re refreshing screens every few minutes waiting for the next Hussman Market Comment for confirmation that the end is nigh.
The LT momentum guys and the pos-theta crowd are still doing their bomb-damage assessments – many of them deeply screwed with deep-deep-deep ITM short option positions, both long and short, dreading the decision to book the losses and blow-up their cash balances, which, they had convinced their wives was the only metric that mattered. These guys are currently at the bar…
That leaves SkyNet in charge…the robots are fearless, unfeeling vacuum cleaners that suck broad indexes into narrow little peaks and then snips them off. The humans should be either too gun-shy or cocksure to get this part right…
well said–are you sure the guys at the bar are not passed out and on the floor.
there is a solid argument to be made for a melt up with rising rates and inflation.
dead on Mr. H
i read a good article on this just a few days ago.
crescent also has some very good white papers on this subject.
and yes input costs–thats a big part of my play.
how long will this go on–probably tell it end very badly.
any guesses where bond rate unwind the markets??
lots of luck to all.
sb