Inflation Warning: You Might Want To Sell Soon...
In a Nutshell
Markets recovered despite the worst PPI report since early 2023 (headline from 4.3% to 6%, core from 4.4% to 5.2%) and prior bad CPI data, but high inflation, weak labor market, and dropping consumer spending signal caution—sell soon amid extreme greed and overbought levels near all-time highs. Fed rate cuts unlikely with sticky inflation; geopolitical factors like Iran tensions add risks. Key trades: $3,200 profit shorting overbought Marvel Technologies; UNH up 50% to $400/share (hold long-term but take profits); free tools like risk-reward calculator available, plus LPP live trading promo.
These notes were generated by AI and may contain inaccuracies.
Markets show incredible recovery despite one of the worst producer price index (PPI) reports since 2022 or 2023. Yesterday's CPI report was worse than expected. Today, markets sold off pre-market after the PPI release.
PPI and Core PPI Data
Expectation was for inflation to go from 4.3% to 4.9%; actual went from 4.3% to 6%—worst overall PPI since early 2023. Core PPI expectation was 4.3%, went from 4.4% to 5.2%—one of the worst since mid to late 2022.
In 2022, when inflation hit 40-year highs, Federal Reserve raised interest rates, not cut them. With current PPI and CPI data, inflation is too high for rate cuts to inflate markets higher.
Much of inflation ties to Iran, but no update on peace deal. Trump heading to China to meet Chinese president and top American CEOs: Elon, Jensen, Tim Cook—like Avengers of CEOs. Markets pushed higher pre-market celebrating this.
Macro Outlook Warnings
No reason to panic if markets aren't, but be cautious at elevated levels with extreme greed. Red signs: high inflation, weak labor market, Americans lacking disposable income over past 5-6 years, consumer spending expected to drop more in 2026. Markets nearly at all-time highs despite worst producer inflation since 2022. PPI is a lagging indicator; markets take time to react but are pushing higher now—don't be surprised if they drop. Avoid being overleveraged at overbought levels.
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