Yesterday was unlikely the 1Q24 market top. Feels more like profit-taking as prices retrace gains of last 4 days. Proper yesterday is "sell off on good news" not a bad CPI report.

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
The video in this report is only accessible to members

VIDEO: Yesterday's 2% selloff is an over-reaction to the hot CPI print.  We also think it is a touch early to call for a top in equity markets for 1Q24.

Please click below to view our macro minute (duration: 6:13).

The video in this report is only accessible to members
The video in this report is only accessible to members

Tuesday's selloff in equites is the largest decline of 2024 so far, after Jan CPI came in "hot" vs consensus with Core CPI +0.39% (vs consensus +0.30%). While Tuesday's decline was indeed large, this simply takes us to prices 4 trading days ago -- in other words, this is a mild retracement of recent gains:

Is this the peak for equities in the first half of 2024? In our view, this is not likely and we think this pullback will soon get bought (aka "buy the dip"):- first, a sure sign of a near-term peak is "a sell-off on good news"- Tuesday was a bad data point (CPI) and a sell-off- second, there is still too much dry powder- NYSE margin debt is still below July 2023 levels- third, sentiment is still skeptical- angry bears were pounding chests in force yesterday Of course, we are seeing some things that make us uncomfortable. The bond market is selling off sharply (yields up) with 10-yr yields now 4.285%, and way up from 3.865% just a week ago. And post this CPI report, we are hear...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

More from the author

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Want to receive Regular Market Updates to your Inbox?

I am your default error :)