Mish’s Daily: Inflation Fell to the Fed’s Target-Or is That a Moving Target?
Mish’s Daily: Inflation Fell to the Fed’s Target-Or is That a Moving Target?
Written by Michele ‘Mish’ Schneider
Friday the market woke up to great news.
Mission accomplished on inflation.
Yahoo Finance reported: “The Fed’s preferred inflation measure — a “core” Personal Consumption Expenditures index that excludes volatile food and energy prices — clocked in at 2.9% for the month of December, beating estimates.”
Furthermore, the core PCE inflation rate fell to 1.5% on a three-month annualized basis, its lowest since late 2020. On a six-month basis it was 1.9% for the second month in a row.
Both of those marks are below the Fed’s 2% target.
Except, the PCE does not include food and energy.
Another headline that hit the news Friday:
“Yemeni Houthis hit with a missile a tanker operated on behalf of commodity trading giant Trafigura. The tanker is on fire.”
Oil traded over $78 a barrel. The price cleared the 200-daily moving average and confirmed an accumulation phase.
Should oil remain above $78, the next level to watch is $80.
Over $80, an emotional trip to $100 is not out of the question.
More importantly, that could trigger a bigger move in gold and silver.
Of course, the Fed cannot dot plot war and geopolitical stress-but shouldn’t they?
Remember this?
If you do not, this is the chart that overlays CPI from the 1970’s with CPI from 2014 until the end of 2023.
CPI fell to under 2% in 1976-1977, then turned right back around and screamed.
Oil had a lot to do with that.
Here we are. CPI is not quite at 2% but core PCE is.
Should oil continue its run and become more parabolic in nature, then this chart is eerily prescient.
Super cycle of commodities?
Not all commodities have to run in a super cycle like the one that began in 1977 until the peak in 1980.
But if oil and metals take charge, along with certain food commodities, then the FED will be stuck.
As for the market that has been counting on rate cuts to keep the equities moving higher?
That will present a newer and bigger worry. Stagflation.
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Mish in the Media
CMC Markets Keep watching Mish’s clips on trading futures and you’ll be making money in commodities in no time 01-25-24
CNBC Asia Mish is a favorite guest in Singapore, where she gets to talk about the macro and how to think about investing in the big picture. This is a short clip on Tesla 01-25-24
Stockpick Jillian Glickman and Mish discuss economic outlook and current investment picks plus forecasts on inflation. 01-22-24
Dale Pinkert FXTrader Mish and Dale discuss the equities and futures marklets and how she and MarketGauge are positioned right now 01-25-24
CMC Markets Mish covers commodities and futs ahead of the GDP-which came out soft hence metals oil rally 01-24-24
Yahoo Finance Mish makes up a new ETF (not real) called VAIN-but really discusses the basket of stocks that are worth watching 01-24-24
Business First AM Mish talks about Alibaba and how the opinions of China’s demise might be a bit exaggerated 01-23-24
Business First AM All about retail and the stock pick Abbvie (ABBV) 01-23-24
Schwab Network Mish and Nicole dig deep into trends and stocks to watch for next big moves as we are full January trend mode 01-22-24
Your Daily Five StockchartsTV Mish covers 6 stocks that all about how folks look and feel with very specific levels to watch-set your alert 01-22-24
CMC Markets Are major commodities losing momentum? A look at oil, gold, dollar, the SPY and NatGas 01-17-24
Against All Odds Jason Perz Podcast-The mental game of trading, commodities, futures, equities, technical analysis, macro-we cover it all 01-16-24
StockchartsTV How Calendar Ranges can Predict Market Direction-Mish and Geoff cover how this indicator tells you who and what to believe, when to act and what to trade 01-16-24
Coming Up:
January 30 Singapore Radio Breakfast Bites
February 2 Benzinga Pre Market Show
February 5 Money Show Life with Chuck Jaffe
February 21-23 The Money Show in Las Vegas
Weekly: Business First AM, CMC Markets
ETF Summary
S&P 500 (SPY) 480 now the pivotal zone
Russell 2000 (IWM) 195 pivotal, 190 support to hold
Dow (DIA) 375 support
Nasdaq (QQQ) 408-409 support
Regional banks (KRE) 50 key to hold
Semiconductors (SMH) 184 support
Transportation (IYT) 262 now pivotal
Biotechnology (IBB) 135 pivotal
Retail (XRT) Held support at 65 but still needs to get back over 70.00
20240127
