CPI Data Reignites Fears of Inflation and Market Risks

Today’s CPI report reignited inflation fears and the economic ramifications. Truth be told, this market has been overbought and technically overextended and accompanied by decelerating momentum and volume. Now we are witnessing early signs of capitulation. This is healthy and creates the ideal environment for a relief rally.

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Despite Profit Taking, Sentiment Still Favors Value

The preference for value over growth or momentum as a dominant theme may be temporarily succumbing to profit taking. Volume was relatively for the Dow 30 Industrials (DIA), Utilities (XLU), Financials (XLF) and Healthcare (XLV). Also worth mentioning is the 1-month new low on the SP-500 (SPY). Short-term support levels on the SP-500 have deteriorated to less than

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Words of “Capital Gains Tax Increases” Curse Market Rally

It was all “fun and games” until someone mentioned the most vile and profane word known to Wall Street, i.e. taxes. Not that it was new news, but apparently investors didn’t want to hear anymore about President Biden’s proposed doubling of the capital gains rate for anyone earning over $1mm per year. (If my 4th grade teacher Sister Margaret heard him say this, she would have washed his mouth out with soap!)

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Investors Fear “FOMO”

While there were no major economic data releases and the majority of earnings were positive, investors appear to be adopting an aversion towards risk…

…Realization that the global rise in Covid19 infections could slow down the rate of economic recovery more than expected was being reflected in…

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