As we approach a full month of the government being shut down, we find ourselves living in a data desert. A rare exception came this morning in the form of the Consumer Price Index, which was a little lower than expectations.
As such, equities have vaulted to new lifetime highs, including the S&P futures:
And the NASDAQ futures:
And, over the past two weeks, volatility has done a complete V-turn, exploding from 18 to 28 and back to 18 again.
Folks tend to be myopic about the CPI since, over the long haul, inflation has absolutely ravaged the economy. A present value of 3.0 versus 3.1 doesn’t amount to squat considering what’s happened since, well, pretty much the 1940s.
I’m coming into the day quite light since I’m traveling, but it’ll be interesting to see if these gains stick or not by the end of the day. Remember, next week is going to be absolute mayhem with the last huge earnings week of 2025 as well as the FOMC on Wednesday, to say nothing of Xi/Trump on Thursday.
