Model switches to CASH/NEUTRAL. After today’s hot CPI, Powell’s seasonality excuse to justify the reason for the prior hot inflation reports holds less water. To start rate cuts, the Fed needed to see evident weakness in the economy or the kind of cooler inflation readings that were the norm in 2H 2023. Three months into 2024, we have neither. Cuts get deferred.
That said, liquidity via stealth QE will remain an important factor in guiding markets so will be closely monitored.
Two of the AI-meme stock leaders, NVDA and SMCI which we sent short sale set-up reports on a few days ago are both struggling.
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