Wow, a positive surprise? The August 10th CPI Report sees a better than expected inflation read! What kind of world are we living in here? This is something that hasn’t happened in a long, long time!
- US July Consumer Prices Index (Headline Number): UNCHANGED vs +0.2% Expected (Better than expected!)
- US July CPI Ex-Food & Energy: 0.3% vs +0.5% Expected (Better than expected!)
*US Jul Consumer Prices Unchanged; Consensus +0.2%
*US Jul CPI Ex-Food & Energy +0.3%; Consensus +0.5%
*US Jul Consumer Prices Increase 8.5% From Year Earlier; Core CPI Up 5.9% Over Yearhttps://t.co/1RtiKOkAsc
— *Walter Bloomberg (@DeItaone) August 10, 2022
As a result: a bull steepening is taking place! That’s when the short-rate falls at a faster rate than the longer-term rate, which is a correction of the yield curve inversion. As a result, the Fed Futures is starting to price in a smaller rate hike in September.
FED SEEN RAISING INTEREST RATES BY 50 BPS IN SEPT, BASED ON FED FUNDS FUTURES PRICING, VERSUS 75 BPS HIKE SEEN BEFORE CPI REPORT
— *Walter Bloomberg (@DeItaone) August 10, 2022
And let’s talk about the most important thing: Stocks are ripping.
The S&P 500 rocketed higher 1.64% immediately on the news, the Nasdaq soared more than 2%, and the IWM is trading higher by more than a percent-and-a-half as well!
We’ll have to wait until open to see how this plays out, but as it stands, it looks like bulls are about to wake up very, very happy.
For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!
