The government will post the Consumer Price Index (CPI) tomorrow on Tuesday. But the data is unlikely to change the Fed's dovish (“rate cut”) position, unless prices rise significantly. Rising energy prices and inflation are expected, but markets are more likely to rise or not react than panic.
Key takeaways in tomorrow’s report:
CPI Data: Unlikely to alter the Fed's stance unless a significant rise
Energy Prices will lift inflation.
Core PCE weighs on The Fed policy, so energy and food are effectively rounding errors to their model (“Batman’s Gotham City economy”)
Insurance Costs: Motor vehicle insurance premiums rising.
Stock Market: Markets may rise further or remain stable.
Keep it simple. Follow the money trail by holding sectors that benefit from higher government spending, such as defence and aerospace.
S&P 500
Here are the results of what happened when SPY fell by more than -0.75% and what it did in the next coming days:
Source: User post.
SPY rose 7 out of 8 times after going down more than -0.75 with the next day's average of +0.81.
In the following weeks, SPY went up 6 out of 7 times with an average return of +1.40%.
Another Fun Fact: on the October 19, 1987, Black Monday Crash, markets lost -20% in a single day. That was exactly 33 years, 33 months, 33 weeks, and 33 days before April 8, 2024, which is this coming Monday, the date of the solar eclipse.
The Week Ahead
Paste this week’s entire list of stock tickers to any “Create Portfolio” page and save:
MSFT, META, GOOGL, T, VZ, ENPH, BA, F, KO, INTC, TLRY, ROKU, GM, SNAP, MMM, CLF, GE, DPZ, SPOT, V, PACW, APLD, RCL, LW, CMG, XOM, TDOC, MCD, LUV, RTX, NUE, PTC, MA, PG, CVX, CROX, NEE, ALK, VLO, NXPI, NOW, ABBV, BMY, FSLR, GEHC, DXCM, CDNS, LRCX, TMO, ENVX
Case Study: From $2,000 to $112,000 in a Day
Always demand proof from user comments via a screen shot.
What is the secret sauce to this trade?