The closely watched monthly CPI data is out, and the big news is that in spite of the tariffs, inflation has – – for the 5th month in a row – – come in lower than expectations. Thus, equities are once again, on the whole, at lifetime highs.
In turn, bonds are starting to stabilize, with the /ZB contract up about half a percent as of this writing.
In a way, the bigger news than CPI is what happened with Nvidia. Trump has TACO’d yet again, as he does on a daily basis, and has changed his mind on restricting NVDA chips to China. In light of this good news for shareholders, NVDA is ripping to yet another lifetime high. I suppose it won’t be long before people are watching this to become a $5 trillion company.
Largely egged on by NVDA, the /NQ futures are likewise blasting to levels, as Trump might say, never seen before.
For myself, my only index short is the Dow Industrials, by way of DIA puts. Mercifully, the /YM is actually a little in the red, which is an incredible accomplishment considering the sea of green which surrounds it.
And, while this is all going on, volatility is once again sashaying right out of the building, as people are convinced, we now live in an age in which markets never go down. Indeed, most traders today have never even experienced a real bear market, so that is a totally reasonable conclusion on their part.
The only meaningful drop in any of the futures is with Bitcoin, and it was kind of easy to see this coming. The reason? Arrogance. The amount of high-flying, told-you-so-ing, and unchecked optimism among this crowd was just screaming for a reversal, so this sucker did a hard U-turn and has burned off the $6,000 pop it enjoyed recently. The /BTC is back to where it was Thursday.
My portfolios remain very light in this unhinged loony-bin, but frankly it’s an enormous relief to have this data point behind us, since it clears a lot of the smoke from the battlefield.
Best of luck to you out there today!
