It’s About To Get Real Again
Degeneracy flares amid incoming inflation data.
It won’t be $AMC or $DJT or even $GME moving markets today, people.Those meme stocks may rise yet again amid another flare-up of the degen economy, but it’s important to understand that their collective market capitalization adds up to a rounding error in the real scheme of things.
That Producer Price Index data for April sure seemed to be ideal for them, though.
This classic squeeze with 21st century social media effects on top can continue as long as there’s meaningful short interest, ample days to cover, and some serious fervor. And all it takes to manufacture enough of that is an illustration of a guy leaning forward in a chair.
Unless you’re getting squeezed or doing some squeezing, it’s equal parts amusement, aggravation, and amazement – though it does make a mockery of the “efficient market hypothesis.”
The consensus expectation is for a 0.4 percent month-over-month rise, consistent with March, and a 3.4 percent year-over-year rise, down from 3.5 percent, in the headline CPI.
The forecast for core CPI is 0.3 percent month over month compared to 0.4 percent in March and 3.6 percent year over year compared to 3.8 percent.
Headline PPI data came in above expectations, but subcategories that feed into the Federal Reserve’s preferred inflation gauge – the Personal Consumption Expenditures Price Index – were softer month over month.
The Yen jumped overnight before falling as interest rates eased on a hotter than expected PPI whose PCE components were softer than expected which coincided with a 100% rally in meme stocks because of a chair picture.GME rallied another 60 percent during regular trading hours on Tuesday. It was surging again in the after-market, up double digits percentage-wise less than 30 minutes into that session.
And the S&P 500 was up half a percentage point after a basically flat Monday.
Investors, traders, and speculators appear to be preparing for something real today, though: At the close on Tuesday the CBOE 1-Day Volatility Index was pricing in about a 1 percent move for CPI Day.
Again, let’s be careful out there.
