9.1% — Prices of everyday items rose 9.1% from last year … The biggest increase since November 1981.
When the CPI data dropped, the markets reacted violently … dropping as much as 3% from premarket highs.
But buyers showed up and pushed the markets into positive territory midday.
Ultimately markets settled slightly lower. The Dow fell 0.7%, and the Nasdaq’s decline was limited to just 0.2%
Notably, the Consumer Staples and Consumer Discretionary sectors were the only sectors to end the day in positive territory.
Did Inflation Peak?
The cost of fuel is a main driver of inflation. And the price of gasoline is down more than 8% from its peak of $5.02 per gallon a month ago today.
If energy prices continue to fall, it’s fair to assume that the JP Morgan (JPM) model, which we shared yesterday, is accurate.
Their conclusion … “inflation peaked in June.”
Musk & Twitter
Shares of Twitter (TWTR^) rose nearly 8% after the company announced its intentions to sue Elon Musk.
The company claimed it needs “only four days” to beat musk in court.
At writing, Bitcoin^ is trading below $20,000.
Crypto lender Celsius filed for chapter 11 bankruptcy protection. The firm is the latest in a long string of failures in the crypto space.
Our stance on crypto remains unchanged … The weak need to go.
This shake-out is ultimately a bullish indicator.
Yesterday, the yield curve inversion between the 2 and 10-year bonds reached its biggest spread since 2000.
This “recession indicator” has grown too big to ignore.
At this point, a “mild recession” is very likely, as analysts from Bank of America (BAC) concluded.
Other indicators I’m watching:
- The VIX remains elevated but in check
- The put-to-call ratio is oversold … *AGAIN*
- RSI levels are nuetral
It’s earnings season—Big banks start reporting premarket today. Our main watch…
- JPMorgan Chase (JPM)
- Morgan Stanley (MS)
The next major date on our calendar is July 28th…
- Q2 GDP numbers drop premarket
- The Fed will announce its latest rate hike in the afternoon
*HTGM has support at $1.50
*TRVI has support at $3.50, resistance at $4
*FNKO has support at $22
^CBIO has resistance at $1.80, support at $1.60
TH is on watch
WVE has support at $4
SIGA has resistance at $15
CELH has support at $75
ALDX has support at $5
NCNA has resistance at $1.5
VERU has resistance at $16
^CTIC has support at $6.50
SGEN has resistance at $180
TCRT has resistance at $1.50