Inflation is having its "Volcker moment" as 34% of CPI (by weight) in deflation, the same point in Oct '82. As for "cash is a great alternative," S&P 500 in 10 days exceeds 4% return of cash, "cash"-ites have to wait another 355 days to match the return of stocks.

MACRO CATALYST WATCH: Wednesday

8:30am ET: Dec PPI (Producers Price Index) Core Street +0.1% MoM (was +0.4% last month)

  • PPI Core (ex-food and ex-Energy) should show same type of continual improvement seen in CPI.
  • If Dec is +0.1% or so, this takes 3M annualized to 2.39%, down from 2.69% last month. In our view, another data point showing inflation trajectory slowing sharply.

YTD S&P 500 ~4% means the "cash is a great alternative"-ites need to wait another 35...

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