“Pressure is something you feel when you don't know what you're doing.” ~Chuck Noll

Good evening,

It was the second consecutive down week for the S&P 500, with much of the pressure on stocks this week originating from a hotter than expected CPI print, released on Wednesday. Core CPI came in hotter than Fundstrat’s expectations, as well as the Street’s. The MoM reading came in at +0.36%, the same as it was in February.

As Head of Data Science “Tireless” Ken Xuan noted during our weekly research huddle, “If you look at the details of this hot CPI print, the primary culprit is still car insurance, which is still surging at a 22% year-over-year rate, and as we’ve said before, that’s a lagging function of increases in auto prices.” In Xuan’s view, inflation is still tanking. “One number does not make a change in the trajectory of inflation,” he asserted.

That sparked a question from Head of Technical Strategy Mark Newton: “Hold on, you said one number,” Newton interjected, “but it’s really been three numbers, right? The last three CPI reports have been hotter. For January and March we pointed out seasonality factors and suggested that this was a short-term effect and the metrics would revert back. We are still seeing auto insurance bo...

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