INTRADAY ALERT: 'Soft' Oct CPI with only 7 of 31 Core components seeing inflation. Wow. Face ripper intact. YE rally thesis intact.

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The video in this report is only accessible to members

A "face ripper" rally is underway as today's October CPI report vastly undershot consensus.

  • Core CPI came in at +0.23% MoM vs consensus +0.30%
  • As we noted in multiple notes this week, Consensus was leaning "hotter" as many forecasts at +0.34% to +0.38%
  • The softside reading came in the right places
    - Shelter slowed to +0.30%, among the slowest readings all year (42% weight)
    - cars still tanking used and new (>12% weight)
  • But the bigger story seems to be inflation could be "hitting a wall"
    - only 7 of 31 Core CPI components saw a rise in Oct
    - Wow
  • This should drive a change in both Fed's view of the "stickiness" of inflation and also the market narrative

Bottom line: We said the risk/reward favorable into CPI because so much skepticism. YE rally intact

This strengthens our base for a rally into YE. While there are some peculiar technical dynamics as noted by Mark Newton, the key in our view is:

  • investors bearishly positioned
  • yields falling
  • we like $QQQ $IWM -- FAANG and small-caps
The video in this report is only accessible to members
The video in this report is only accessible to members

The video in this report is only accessible to members

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36 Granny Shot Ideas: We performed our quarterly rebalance on 10/18. Full stock list here -> Click here

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