PPI Inflation Numbers Coming In Tomorrow
In his Daily Market Notes report to investors, while commenting on PPI, Louis Navellier wrote:
Q4 2021 hedge fund letters, conferences and more
Brick In the Wall
The Wall of Worry has added a few bricks of uncertainty around inflation, monetary policy, Ukraine, masking and pandemic cases.
All these factors are crowded into the front burners for investors as this week begins. This morning, Fed Governor Jim Bullard claimed backpedaling now by the Fed on tightening policy in the face of the highest inflation numbers in 40 years would threaten the credibility of the Fed, and resulted in interest rates rising again after pulling back in a flight to quality on the threat of the invasion late last week.
An emergency private Fed meeting has been scheduled today which may result in an unscheduled announcement this week.
Tomorrow's PPI
The earning season is winding down to a close with a handful of remaining earnings this week, along with PPI inflation numbers and US retail sales numbers. So far this morning, stocks have been trying to rise on reopening hopes and less fears about Ukraine but the day is early and volatility remains high. Buckle up, a bumpy ride is in the cards.
The Fed is having this special closed-door meeting today and I expect that they will basically say they will not be raising rates amidst all this uncertainty. And this is what the European Central Bank did. The European Central Bank says, "We're not raising rates while we have all this Russian Ukrainian global tensions." I suspect our Fed is going to say the same thing.
Bad Gas
Tomorrow, we're going to get the Producer Price Index. I'm personally very curious about energy. The CPI had energy falling in January, which was shocking to me, because I saw the prices at pumps rise, at least in the states I live in. So it'd be interesting to see what energy is in the Producer Price Index report tomorrow.
But our Fed, I think, wants to basically stick to the plan, which is to unwind the quantitative easing and raise rates in late March as they planned.
Jerome Powell, the Fed chairman, is a consensus builder. Whatever they do, he wants to build a consensus. So the markets are getting choppy. They usually get choppy at the end of the earnings season. But we've had very good guidance, folks.
And so just hang on, enjoy the ride. No reason to panic. But I do think we have to get through the PPI report tomorrow, see the reaction, and then see if the 10-year treasury gets above about 2% and stays there.
Coffee Beans
For Valentine's Day, the Bronx Zoo lets you name a Madagascar hissing cockroach after your sweetheart for $15, and a certificate to memorialize the gift. The zoo also had other items on offer — roach socks and roach beanies. Source: NPR. See the full story here.
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