A hotter-than-expected inflation figure triggered a choppy session on Tuesday, with the major U.S. equity averages eventually ending with a mixed performance. The Dow and S&P 500 finished in the red, while the Nasdaq posted a modest advance.
CPI came in hotter than forecasts, which did not shock the market as oil and food prices stabilized last month. And the core reading was also higher, and the recent jobs data sets the stage for the inflation-fighting Fed to continue pushing the Fed Funds Rate towards 5% at upcoming FOMC meetings. The overall market reaction across all asset classes was not dramatic. We could see a delayed response over the coming sessions as the inflation hawks beat their drums and a highly uncertain geopolitical landscape hovers over the markets.
Stocks showed wide swings early in the session, as investors metabolized consumer price statistics that came in above what economists were predicting. Trading stabilized in the afternoon, although the S&P 500 broke a two-day winning streak but edging just below the flat line in the final moments of the session.
Looking at the statistics, the consumer price index rose 0.5% in January compared to the previous month. This increase was sharper than the expected advance of 0.4%. On an annual basis, CPI rose at a 6.4% pace, while core prices, excluding the volatile food and energy sectors, showed a 5.6% increase from last year. The release of the inflation data pushed Treasury yields higher. The 10-year Treasury yield climbed 4 basis points to 3.76%. The 2-year yield gained 9 basis points to 4.62%.
Chart: SPX daily & 15 mins
From the tech side of analysis, the SPX reached 4150ish 15 mins trendline resistance and fail to breakup, which is likely to pull back and retest 4060ish level (21 EMA from daily).
Chart: QQQ daily & 15 mins
Qs looks way more positive compared to SPY, since Qs already break up prior 297ish resistance, and even Qs will somehow correct back as the SPY do, however, its likely Qs only pull back to 8EMA instead of 21 EMA.
In short, it's like pull back from bull trend so far.
Please feel free to express your ideas and thoughts in the comment section.
CPI came in hotter than forecasts, which did not shock the market as oil and food prices stabilized last month. And the core reading was also higher, and the recent jobs data sets the stage for the inflation-fighting Fed to continue pushing the Fed Funds Rate towards 5% at upcoming FOMC meetings. The overall market reaction across all asset classes was not dramatic. We could see a delayed response over the coming sessions as the inflation hawks beat their drums and a highly uncertain geopolitical landscape hovers over the markets.
Stocks showed wide swings early in the session, as investors metabolized consumer price statistics that came in above what economists were predicting. Trading stabilized in the afternoon, although the S&P 500 broke a two-day winning streak but edging just below the flat line in the final moments of the session.
Looking at the statistics, the consumer price index rose 0.5% in January compared to the previous month. This increase was sharper than the expected advance of 0.4%. On an annual basis, CPI rose at a 6.4% pace, while core prices, excluding the volatile food and energy sectors, showed a 5.6% increase from last year. The release of the inflation data pushed Treasury yields higher. The 10-year Treasury yield climbed 4 basis points to 3.76%. The 2-year yield gained 9 basis points to 4.62%.
From the tech side of analysis, the SPX reached 4150ish 15 mins trendline resistance and fail to breakup, which is likely to pull back and retest 4060ish level (21 EMA from daily).
Qs looks way more positive compared to SPY, since Qs already break up prior 297ish resistance, and even Qs will somehow correct back as the SPY do, however, its likely Qs only pull back to 8EMA instead of 21 EMA.
In short, it's like pull back from bull trend so far.
Please feel free to express your ideas and thoughts in the comment section.
